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|                                                                                   |   |    |    |   | 2010     |   |   |    |   |   |    |   |   | 2009     |    |   |    |   |
|----------------------------------------------------------------------------------------|--------|---------|---------|--------|----------|--------|--------|---------|--------|--------|---------|--------|--------|----------|---------|--------|---------|--------|
|                                                                                   |   |    |    |   |     |   |   | Average |   |   |    |   |   |     |    |   | Average |   |
|                                                                                   |   | Average |    |   |     |   |   | Yield/  |   |   | Average |   |   |     |    |   | Yield/  |   |
| dollars in thousands                                                         |   | Balance |    |   | Interest |   |   | Cost    |   |   | Balance |   |   | Interest |    |   | Cost    |   |
| Assets                                                                                 |   |    |    |   |     |   |   |    |   |   |    |   |   |     |    |   |    |   |
| Interest-earning assets:                                                               |   |    |    |   |     |   |   |    |   |   |    |   |   |     |    |   |    |   |
| Loan portfolio (1)                                                                     |   | $       | 615,887 |   |     | $      | 34,995 |    |   |   | 5.68    | %      |   | $        | 574,966 |   |    | $      | 32,685 |   |   |   | 5.68 | % |
| Investment securities, federal funds sold and interest-bearing deposits                |   |    | 165,753 |   |     |   | 4,542  |    |   |   | 2.74    | %      |   |     | 143,966 |   |    |   | 5,202 |   |   |   | 3.61 | % |
| Total interest-earning assets                                                          |   |    | 781,640 |   |     |   | 39,537 |    |   |   | 5.06    | %      |   |     | 718,932 |   |    |   | 37,887 |   |   |   | 5.27 | % |
| Cash and cash equivalents                                                              |   |    | 13,709  |   |     |   |   |    |   |   |    |   |   |     | 13,533  |   |    |   |   |   |   |   |   |   |
| Other assets                                                                           |   |    | 45,107  |   |     |   |   |    |   |   |    |   |   |     | 30,138  |   |    |   |   |   |   |   |   |   |
| Total Assets                                                                           |   | $       | 840,456 |   |     |   |   |    |   |   |    |   |   | $        | 762,603 |   |    |   |   |   |   |   |   |   |
|                                                                                   |   |    |    |   |     |   |   |    |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |
| Liabilities and Stockholders' Equity                                                   |   |    |    |   |     |   |   |    |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                          |   |    |    |   |     |   |   |    |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |
| Savings                                                                                |   | $       | 30,355  |   |     | $      | 123    |    |   |   | 0.41    | %      |   | $        | 28,486  |   |    | $      | 46 |   |   |   | 0.16 | % |
| Interest-bearing demand and money market accounts                                      |   |    | 161,494 |   |     |   | 1,510  |    |   |   | 0.94    | %      |   |     | 142,513 |   |    |   | 1,458 |   |   |   | 1.02 | % |
| Certificates of deposit                                                                |   |    | 421,525 |   |     |   | 9,305  |    |   |   | 2.21    | %      |   |     | 355,489 |   |    |   | 10,727 |   |   |   | 3.02 | % |
| Long-term debt                                                                         |   |    | 70,823  |   |     |   | 2,278  |    |   |   | 3.22    | %      |   |     | 94,745  |   |    |   | 3,502 |   |   |   | 3.70 | % |
| Short-term borrowings                                                                  |   |    | 2,973   |   |     |   | 42     |    |   |   | 1.41    | %      |   |     | 1,421   |   |    |   | 29 |   |   |   | 2.04 | % |
| Guaranteed preferrred beneficial interest  in junior subordinated debentures |   |    | 12,000  |   |     |   | 322    |    |   |   | 2.68    | %      |   |     | 12,000  |   |    |   | 404 |   |   |   | 3.37 | % |
| Total interest-bearing liabilities                                                     |   |    | 699,170 |   |     |   | 13,580 |    |   |   | 1.94    | %      |   |     | 634,654 |   |    |   | 16,166 |   |   |   | 2.55 | % |
| Noninterest-bearing demand deposits                                                    |   |    | 65,041  |   |     |   |   |    |   |   |    |   |   |     | 53,584  |   |    |   |   |   |   |   |   |   |
| Other liabilities                                                                      |   |    | 5,772   |   |     |   |   |    |   |   |    |   |   |     | 6,000   |   |    |   |   |   |   |   |   |   |
| Stockholders' equity                                                                   |   |    | 70,473  |   |     |   |   |    |   |   |    |   |   |     | 68,365  |   |    |   |   |   |   |   |   |   |
| Total Liabilities and Stockholders' Equity                                             |   | $       | 840,456 |   |     |   |   |    |   |   |    |   |   | $        | 762,603 |   |    |   |   |   |   |   |   |   |
|                                                                                   |   |    |    |   |     |   |   |    |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |
| Net interest income                                                                    |   |    |    |   |     | $      | 25,957 |    |   |   |    |   |   |     |    |   |    | $      | 21,721 |   |   |   |   |   |
|                                                                                   |   |    |    |   |     |   |   |    |   |   |    |   |   |     |    |   |    |   |   |   |   |   |   |   |
| Interest rate spread                                                                   |   |    |    |   |     |   |   |    |   |   | 3.12    | %      |   |     |    |   |    |   |   |   |   |   | 2.72 | % |
| Net yield on interest-earning assets                                                   |   |    |    |   |     |   |   |    |   |   | 3.32    | %      |   |     |    |   |    |   |   |   |   |   | 3.02 | % |
| Ratio of average interest-earning assets to average interest-bearing liabilities       |   |    |    |   |     |   |   |    |   |   | 111.80  | %      |   |     |    |   |    |   |   |   |   |   | 113.28 | % |

----

|                                                                        |   | Year ended December 31, 2010 |   |
|-----------------------------------------------------------------------------|--------|--------------------------------------------------|--------|
|                                                                        |   | compared to year ended            |   |
|                                                                        |   | December 31, 2009                           |   |
|                                                                        |   |                                             |   |   | Due to |   |   |   |   |
| thousands                                                                   |   | Volume                                           |   |   | Rate |   |   | Total |   |
|                                                                        |   |                                             |   |   |   |   |   |   |   |
| Interest-Earning Assets                                                     |   |                                             |   |   |   |   |   |   |   |
| Loan portfolio (1)                                                          |   | $                                                | 2,325  |   |   | $ | (15 | ) |   | $ | 2,310 |   |
| Investment securities, federal funds sold and interest bearing deposits     |   |                                             | 597    |   |   |   | (1,257 | ) |   |   | (660 | ) |
| Total Interest-Earning Assets                                               |   | $                                                | 2,922  |   |   | $ | (1,272 | ) |   | $ | 1,650 |   |
|                                                                        |   |                                             |   |   |   |   |   |   |   |   |   |   |
| Interest-Bearing Liabilities                                                |   |                                             |   |   |   |   |   |   |   |   |   |   |
| Savings                                                                     |   |                                             | 8      |   |   |   | 69 |   |   |   | 77 |   |
| Interest-bearing demand and money market accounts                           |   |                                             | 177    |   |   |   | (125 | ) |   |   | 52 |   |
| Certificates of deposit                                                     |   |                                             | 1,458  |   |   |   | (2,880 | ) |   |   | (1,422 | ) |
| Long-term debt                                                              |   |                                             | (769   | ) |   |   | (455 | ) |   |   | (1,224 | ) |
| Short-term debt                                                             |   |                                             | 22     |   |   |   | (9 | ) |   |   | 13 |   |
| Guaranteed preferrred beneficial interest in junior subordinated debentures |   |                                             | -      |   |   |   | (82 | ) |   |   | (82 | ) |
| Total Interest-Bearing Liabilities                                          |   | $                                                | 895    |   |   | $ | (3,481 | ) |   | $ | (2,586 | ) |
| Net Change in Net Interest Income                                           |   | $                                                | 2,027  |   |   | $ | 2,209 |   |   | $ | 4,236 |   |
| (1) Average balance includes non-accrual loans                              |   |                                             |   |   |   |   |   |   |   |   |   |   |

----

|                                                                          |   | Years Ended December 31, |      |   | % change |   |
|-------------------------------------------------------------------------------|--------|-----------------------------------------|-----------|--------|---------------|--------|
|                                                                          |   | 2010                                    |      |   | 2009          |   |   | 2010 vs. 2009 |   |
|                                                                          |   |                                    |      |   |          |   |   |   |   |
| Recognition of other than temporary decline in value of investment securities |   | $                                       | -         |   |          | $      | (538,614 | ) |   |   | (100.00 | )% |
| Less: portion recorded as comprehensive income                                |   |                                    | -         |   |          |   | 271,870 |   |   |   | (100.00 | )% |
| Impairment loss on investment securities, net                                 |   |                                    | -         |   |          |   | (266,744 | ) |   |   | (100.00 | )% |
| Loan appraisal, credit, and miscellaneous charges                             |   |                                    | 676,805   |   |          |   | 688,101 |   |   |   | (1.64 | )% |
| Income from bank owned life insurance                                         |   |                                    | 504,296   |   |          |   | 417,110 |   |   |   | 20.90 | % |
| Service charges                                                               |   |                                    | 1,905,949 |   |          |   | 1,658,544 |   |   |   | 14.92 | % |
| Gain on sale of asset                                                         |   |                                    | 22,500    |   |          |   | - |   |   |   | n/a |   |
| Gain on sale of loans held for sale                                           |   |                                    | 470,626   |   |          |   | 325,671 |   |   |   | 44.51 | % |
| Loss on the sale of investment securities                                     |   |                                    | -         |   |          |   | (12,863 | ) |   |   | (100.00 | )% |
| Total Noninterest Income                                                      |   | $                                       | 3,580,176 |   |          | $      | 2,809,819 |   |   |   | 27.42 | % |

|                                               |   | Years Ended December 31, |       |   | % change |   |
|----------------------------------------------------|--------|-----------------------------------------|------------|--------|---------------|--------|
|                                               |   | 2010                                    |       |   | 2009          |   |   | 2010 vs. 2009 |   |
|                                               |   |                                    |       |   |          |   |   |   |   |
| Salary and employee benefits                       |   | $                                       | 9,769,401  |   |          | $      | 8,607,141 |   |   |   | 13.50 | % |
| Occupancy expense                                  |   |                                    | 1,772,394  |   |          |   | 1,779,497 |   |   |   | (0.40 | )% |
| Advertising                                        |   |                                    | 399,802    |   |          |   | 449,155 |   |   |   | (10.99 | )% |
| Data processing expense                            |   |                                    | 1,044,972  |   |          |   | 914,250 |   |   |   | 14.30 | % |
| Depreciation of furniture, fixtures, and equipment |   |                                    | 541,642    |   |          |   | 613,205 |   |   |   | (11.67 | )% |
| Telephone communications                           |   |                                    | 170,566    |   |          |   | 152,649 |   |   |   | 11.74 | % |
| Office supplies                                    |   |                                    | 170,447    |   |          |   | 164,154 |   |   |   | 3.83 | % |
| Professional fees                                  |   |                                    | 799,377    |   |          |   | 749,467 |   |   |   | 6.66 | % |
| FDIC insurance                                     |   |                                    | 1,338,305  |   |          |   | 1,134,926 |   |   |   | 17.92 | % |
| Valuation allowance on foreclosed real estate      |   |                                    | 287,934    |   |          |   | - |   |   |   | n/a |   |
| Other                                              |   |                                    | 1,900,343  |   |          |   | 2,015,234 |   |   |   | (5.70 | )% |
| Total Noninterest Expenses                         |   | $                                       | 18,195,183 |   |          | $      | 16,579,678 |   |   |   | 9.74 | % |

----

|                                                                             |   | December 31, |        |   | % change |   |
|----------------------------------------------------------------------------------|--------|-------------------|-------------|--------|---------------|--------|
|                                                                             |   | 2010              |        |   | 2009          |   |   | 2010 vs. 2009 |   |
|                                                                             |   |              |        |   |          |   |   |   |   |
| Cash and due from banks                                                          |   | $                 | 8,695,590   |   |          | $      | 9,960,787 |   |   |   | (12.70 | )% |
| Federal funds sold                                                               |   |              | 615,000     |   |          |   | 695,000 |   |   |   | (11.51 | )% |
| Interest-bearing deposits with banks                                             |   |              | 512,846     |   |          |   | 592,180 |   |   |   | (13.40 | )% |
| Securities available for sale (AFS), at fair value                               |   |              | 34,946,225  |   |          |   | 53,926,109 |   |   |   | (35.20 | )% |
| Securities held to maturity (HTM), at amortized cost                             |   |              | 126,988,316 |   |          |   | 90,287,803 |   |   |   | 40.65 | % |
| Federal Home Loan Bank and Federal Reserve Bank stock- at cost                   |   |              | 6,315,600   |   |          |   | 6,935,500 |   |   |   | (8.94 | )% |
| Loans receivable - net of allowance for loan losses of $7,669,147 and $7,471,314 |   |              | 654,449,936 |   |          |   | 616,592,976 |   |   |   | 6.14 | % |
| Premises and equipment, net                                                      |   |              | 12,132,141  |   |          |   | 11,987,690 |   |   |   | 1.20 | % |
| Foreclosed real estate                                                           |   |              | 10,469,302  |   |          |   | 922,934 |   |   |   | 1034.35 | % |
| Accrued interest receivable                                                      |   |              | 2,784,396   |   |          |   | 2,925,271 |   |   |   | (4.82 | )% |
| Investment in bank owned life insurance                                          |   |              | 17,447,692  |   |          |   | 10,943,396 |   |   |   | 59.44 | % |
| Other assets                                                                     |   |              | 10,579,058  |   |          |   | 9,272,888 |   |   |   | 14.09 | % |
| Total Assets                                                                     |   | $                 | 885,936,102 |   |          | $      | 815,042,534 |   |   |   | 8.70 | % |

----

|                                                                       |   | December 31, |        |   | % change |   |
|----------------------------------------------------------------------------|--------|-------------------|-------------|--------|---------------|--------|
|                                                                       |   | 2010              |        |   | 2009          |   |   | 2010 vs. 2009 |   |
| Deposits                                                                   |   |              |        |   |          |   |   |   |   |
| Noninterest-bearing                                                        |   | $                 | 75,642,197  |   |          | $      | 70,001,444 |   |   |   | 8.06 | % |
| Interest-bearing                                                           |   |              | 648,940,129 |   |          |   | 570,417,345 |   |   |   | 13.77 | % |
| Total deposits                                                             |   |              | 724,582,326 |   |          |   | 640,418,789 |   |   |   | 13.14 | % |
| Short-term borrowings                                                      |   |              | 816,422     |   |          |   | 13,080,530 |   |   |   | (93.76 | )% |
| Long-term debt                                                             |   |              | 70,624,044  |   |          |   | 75,669,630 |   |   |   | (6.67 | )% |
| Guaranteed preferred beneficial interest in junior subordinated debentures |   |              | 12,000,000  |   |          |   | 12,000,000 |   |   |   | 0.00 | % |
| Accrued expenses and other liabilities                                     |   |              | 6,808,383   |   |          |   | 5,683,736 |   |   |   | 19.79 | % |
| Total Liabilities                                                          |   | $                 | 814,831,175 |   |          | $      | 746,852,685 |   |   |   | 9.10 | % |

|                                                                                                                          |   | December 31, |       |   | % change |   |
|-------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|------------|--------|---------------|--------|
|                                                                                                                          |   | 2010              |       |   | 2009          |   |   | 2010 vs. 2009 |   |
| Fixed Rate Cumulative Perpetual Preferred Stock, Series A - par value $1,000; authorized 15,540; issued 15,540                |   | $                 | 15,540,000 |   |          | $      | 15,540,000 |   |   |   | 0.00 | % |
| Fixed Rate Cumulative Perpetual Preferred Stock, Series B -  par value $1,000; authorized 777; issued 777           |   |              | 777,000    |   |          |   | 777,000 |   |   |   | 0.00 | % |
| Common stock - par value $.01; authorized - 15,000,000 shares;  issued 3,002,616 and 2,976,046 shares, respectively |   |              | 30,026     |   |          |   | 29,760 |   |   |   | 0.89 | % |
| Additional paid in capital                                                                                                    |   |              | 16,962,460 |   |          |   | 16,754,627 |   |   |   | 1.24 | % |
| Retained earnings                                                                                                             |   |              | 37,892,557 |   |          |   | 35,193,958 |   |   |   | 7.67 | % |
| Accumulated other comprehensive gain                                                                                          |   |              | 411,188    |   |          |   | 284,474 |   |   |   | 44.54 | % |
| Unearned ESOP shares                                                                                                          |   |              | (508,304   | )      |          |   | (389,970 | ) |   |   | 30.34 | % |
| Total Stockholders' Equity                                                                                                    |   | $                 | 71,104,927 |   |          | $      | 68,189,849 |   |   |   | 4.27 | % |

----

----

----

| Dollars in thousands except share data |   | Year Ended December 31, |      |
|-----------------------------------------------------------------|--------|----------------------------------------|-----------|
|                                                            |   | 2010                                   |      |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
| Operations Data                                                 |   |                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                             |   | $                                      | 25,957    |   |   | $ | 21,721 |   |   | $ | 19,223 |   |   | $ | 18,992 |   |   | $ | 17,327 |   |
| Provision for loan losses                                       |   |                                   | 3,933     |   |   |   | 3,473 |   |   |   | 1,301 |   |   |   | 855 |   |   |   | 406 |   |
| Noninterest income                                              |   |                                   | 3,580     |   |   |   | 2,810 |   |   |   | 2,519 |   |   |   | 3,402 |   |   |   | 2,247 |   |
| Noninterest expense                                             |   |                                   | 18,195    |   |   |   | 16,580 |   |   |   | 14,582 |   |   |   | 13,459 |   |   |   | 12,562 |   |
| Net income                                                      |   |                                   | 4,766     |   |   |   | 2,867 |   |   |   | 3,815 |   |   |   | 5,106 |   |   |   | 4,441 |   |
| Net income available to common shareholders                     |   | $                                      | 3,919     |   |   | $ | 2,020 |   |   | $ | 3,789 |   |   | $ | 5,106 |   |   | $ | 4,441 |   |
|                                                            |   |                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Share Data                                                      |   |                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic net income per common share                               |   | $                                      | 1.31      |   |   | $ | 0.68 |   |   | $ | 1.29 |   |   | $ | 1.92 |   |   | $ | 1.68 |   |
| Diluted net income per common share                             |   | $                                      | 1.30      |   |   | $ | 0.68 |   |   | $ | 1.24 |   |   | $ | 1.79 |   |   | $ | 1.58 |   |
| Cash dividends paid per common share                            |   | $                                      | 0.40      |   |   | $ | 0.40 |   |   | $ | 0.40 |   |   | $ | 0.40 |   |   | $ | 0.37 |   |
| Book value per common share                                     |   | $                                      | 18.25     |   |   | $ | 17.43 |   |   | $ | 17.23 |   |   | $ | 16.79 |   |   | $ | 14.28 |   |
| Common shares outstanding                                       |   |                                   | 3,002,616 |   |   |   | 2,976,046 |   |   |   | 2,947,759 |   |   |   | 2,909,974 |   |   |   | 2,642,288 |   |
| Weighted average common shares outstanding:                     |   |                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                           |   |                                   | 2,985,080 |   |   |   | 2,961,293 |   |   |   | 2,943,002 |   |   |   | 2,664,036 |   |   |   | 2,637,531 |   |
| Diluted                                                         |   |                                   | 3,008,279 |   |   |   | 2,987,901 |   |   |   | 3,053,690 |   |   |   | 2,852,494 |   |   |   | 2,815,985 |   |
|                                                            |   |                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Financial Condition Data                                        |   |                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                                    |   | $                                      | 885,936   |   |   | $ | 815,043 |   |   | $ | 716,685 |   |   | $ | 598,406 |   |   | $ | 575,496 |   |
| Loans receivable, net                                           |   |                                   | 654,450   |   |   |   | 616,593 |   |   |   | 542,977 |   |   |   | 453,614 |   |   |   | 422,480 |   |
| Foreclosed real estate (OREO)                                   |   |                                   | 10,469    |   |   |   | 923 |   |   |   | - |   |   |   | - |   |   |   | 461 |   |
| Total deposits                                                  |   |                                   | 724,582   |   |   |   | 640,419 |   |   |   | 525,168 |   |   |   | 444,994 |   |   |   | 418,013 |   |
| Long and short term debt                                        |   |                                   | 71,440    |   |   |   | 88,750 |   |   |   | 106,486 |   |   |   | 87,561 |   |   |   | 102,614 |   |
| TARP preferred stock                                            |   |                                   | 16,317    |   |   |   | 16,317 |   |   |   | 16,317 |   |   |   | - |   |   |   | - |   |
| Total stockholders’ equity                                |   | $                                      | 71,105    |   |   | $ | 68,190 |   |   | $ | 67,114 |   |   | $ | 48,847 |   |   | $ | 37,729 |   |
|                                                            |   |                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Financial Information                                     |   |                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nonperforming loans (NPLs)                                      |   | $                                      | 13,518    |   |   | $ | 19,287 |   |   | $ | 4,936 |   |   | $ | 414 |   |   | $ | 1,046 |   |
| Troubled debt restructures (TDRs)                               |   |                                   | 16,882    |   |   |   | 11,601 |   |   |   | - |   |   |   | 755 |   |   |   | - |   |
|                                                            |   |                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Performance Ratios                                              |   |                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Return on average assets                                        |   |                                   | 0.57      | % |   |   | 0.38 | % |   |   | 0.59 | % |   |   | 0.87 | % |   |   | 0.80 | % |
| Return on average equity                                        |   |                                   | 6.76      | % |   |   | 4.19 | % |   |   | 7.57 | % |   |   | 12.62 | % |   |   | 12.13 | % |
| Net interest margin                                             |   |                                   | 3.32      | % |   |   | 3.02 | % |   |   | 3.13 | % |   |   | 3.41 | % |   |   | 3.24 | % |
| Efficiency ratio                                                |   |                                   | 61.60     | % |   |   | 67.59 | % |   |   | 67.07 | % |   |   | 60.10 | % |   |   | 64.18 | % |
| Dividend payout ratio                                           |   |                                   | 30.77     | % |   |   | 58.82 | % |   |   | 31.04 | % |   |   | 20.80 | % |   |   | 21.91 | % |
|                                                            |   |                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital Ratios:                                                 |   |                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average equity to average assets                                |   |                                   | 9.44      | % |   |   | 10.03 | % |   |   | 11.54 | % |   |   | 10.41 | % |   |   | 8.74 | % |
| Leverage ratio                                                  |   |                                   | 9.44      | % |   |   | 10.03 | % |   |   | 11.54 | % |   |   | 10.41 | % |   |   | 8.74 | % |
| Total risk-based capital ratio                                  |   |                                   | 12.94     | % |   |   | 13.46 | % |   |   | 14.73 | % |   |   | 13.80 | % |   |   | 11.98 | % |
|                                                            |   |                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Asset Quality Ratios                                            |   |                                   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses to total loans                        |   |                                   | 1.16      | % |   |   | 1.20 | % |   |   | 0.94 | % |   |   | 0.98 | % |   |   | 0.89 | % |
| Nonperforming loans to total loans                              |   |                                   | 2.04      | % |   |   | 3.09 | % |   |   | 0.90 | % |   |   | 0.25 | % |   |   | 0.25 | % |
| Allowance for loan losses to Nonperforming loans                |   |                                   | 56.73     | % |   |   | 38.74 | % |   |   | 104.25 | % |   |   | 383.40 | % |   |   | 361.59 | % |
| Net charge-offs to average loans                                |   |                                   | 0.61      | % |   |   | 0.20 | % |   |   | 0.13 | % |   |   | 0.04 | % |   |   | 0.00 | % |
| Nonperforming assets to total assets (NPLs + OREO)              |   |                                   | 2.71      | % |   |   | 2.48 | % |   |   | 0.69 | % |   |   | 0.07 | % |   |   | 0.26 | % |
| Nonperforming assets and TDRs to total assets                   |   |                                   | 4.58      | % |   |   | 3.90 | % |   |   | 0.69 | % |   |   | 0.20 | % |   |   | 0.26 | % |

----

|           |   | High   |   |   | Low    |   |
|----------------|--------|--------|--------|--------|--------|--------|
| 2009           |   |   |   |   |   |   |
| Fourth Quarter |   | $      | 15.00  |   |   | $      | 10.50 |   |
| Third Quarter  |   | $      | 13.99  |   |   | $      | 11.30 |   |
| Second Quarter |   | $      | 13.85  |   |   | $      | 11.50 |   |
| First Quarter  |   | $      | 20.00  |   |   | $      | 10.50 |   |
|           |   |   |   |   |   |   |   |   |
|           |   | High   |   |   | Low    |   |
| 2010           |   |   |   |   |   |   |   |   |
| Fourth Quarter |   | $      | 18.00  |   |   | $      | 13.25 |   |
| Third Quarter  |   | $      | 15.00  |   |   | $      | 11.20 |   |
| Second Quarter |   | $      | 12.01  |   |   | $      | 11.25 |   |
| First Quarter  |   | $      | 15.25  |   |   | $      | 10.55 |   |

----

----

----

| Management’s Report on Internal Control over Financial Reporting | 18     |
|------------------------------------------------------------------------|--------|
|                                                                   |   |
| Report of Independent Registered Accounting Firm                       | 19     |
|                                                                   |   |
| Consolidated Financial Statements                                      |   |
| Balance Sheets                                                         | 20     |
| Statements of Income                                                   | 21     |
| Statements of Changes in Stockholders’ Equity                    | 22     |
| Statements of Cash Flows                                               | 23     |
|                                                                   |   |
| Notes to Consolidated Financial Statements                             | 25     |

----

----

|   | /s/ Stegman & Company |
|--------|---------------------------|

----

|                                                                                                                      |   | December 31, |        |
|---------------------------------------------------------------------------------------------------------------------------|--------|--------------|-------------|
|                                                                                                                      |   | 2010         |        |   | 2009 |   |
|  Assets                                                                                                              |   |         |        |   |   |   |
| Cash and due from banks                                                                                                   |   | $            | 8,695,590   |   |   | $ | 9,960,787 |   |
| Federal funds sold                                                                                                        |   |         | 615,000     |   |   |   | 695,000 |   |
| Interest-bearing deposits with banks                                                                                      |   |         | 512,846     |   |   |   | 592,180 |   |
| Securities available for sale (AFS), at fair value                                                                        |   |         | 34,946,225  |   |   |   | 53,926,109 |   |
| Securities held to maturity (HTM), at amortized cost                                                                      |   |         | 126,988,316 |   |   |   | 90,287,803 |   |
| Federal Home Loan Bank and Federal Reserve Bank stock - at cost                                                           |   |         | 6,315,600   |   |   |   | 6,935,500 |   |
| Loans receivable - net of allowance for loan losses of $7,669,147 and $7,471,314                                          |   |         | 654,449,936 |   |   |   | 616,592,976 |   |
| Premises and equipment, net                                                                                               |   |         | 12,132,141  |   |   |   | 11,987,690 |   |
| Foreclosed real estate                                                                                                    |   |         | 10,469,302  |   |   |   | 922,934 |   |
| Accrued interest receivable                                                                                               |   |         | 2,784,396   |   |   |   | 2,925,271 |   |
| Investment in bank owned life insurance                                                                                   |   |         | 17,447,692  |   |   |   | 10,943,396 |   |
| Other assets                                                                                                              |   |         | 10,579,058  |   |   |   | 9,272,888 |   |
|                                                                                                                      |   |         |        |   |   |   |   |   |
| Total Assets                                                                                                              |   | $            | 885,936,102 |   |   | $ | 815,042,534 |   |
|                                                                                                                      |   |         |        |   |   |   |   |   |
|  Liabilities and Stockholders' Equity                                                                                |   |         |        |   |   |   |   |   |
| Deposits                                                                                                                  |   |         |        |   |   |   |   |   |
| Noninterest-bearing deposits                                                                                              |   | $            | 75,642,197  |   |   | $ | 70,001,444 |   |
| Interest-bearing deposits                                                                                                 |   |         | 648,940,129 |   |   |   | 570,417,345 |   |
| Total deposits                                                                                                            |   |         | 724,582,326 |   |   |   | 640,418,789 |   |
| Short-term borrowings                                                                                                     |   |         | 816,422     |   |   |   | 13,080,530 |   |
| Long-term debt                                                                                                            |   |         | 70,624,044  |   |   |   | 75,669,630 |   |
| Guaranteed preferred beneficial interest in junior subordinated debentures                                                |   |         | 12,000,000  |   |   |   | 12,000,000 |   |
| Accrued expenses and other liabilities                                                                                    |   |         | 6,808,383   |   |   |   | 5,683,736 |   |
| Total Liabilities                                                                                                         |   |         | 814,831,175 |   |   |   | 746,852,685 |   |
|                                                                                                                      |   |         |        |   |   |   |   |   |
| Stockholders' Equity                                                                                                      |   |         |        |   |   |   |   |   |
| Fixed Rate Cumulative Perpetual Preferred Stock, Series A - par value $1,000; authorized 15,540;  issued 15,540 |   |         | 15,540,000  |   |   |   | 15,540,000 |   |
| Fixed Rate Cumulative Perpetual Preferred Stock, Series B - par value $1,000; authorized 777; issued 777                  |   |         | 777,000     |   |   |   | 777,000 |   |
| Common stock - par value $.01; authorized - 15,000,000 shares; issued 3,002,616 and 2,976,046 shares, respectively        |   |         | 30,026      |   |   |   | 29,760 |   |
| Additional paid in capital                                                                                                |   |         | 16,962,460  |   |   |   | 16,754,627 |   |
| Retained earnings                                                                                                         |   |         | 37,892,557  |   |   |   | 35,193,958 |   |
| Accumulated other comprehensive gain                                                                                      |   |         | 411,188     |   |   |   | 284,474 |   |
| Unearned ESOP shares                                                                                                      |   |         | (508,304    | ) |   |   | (389,970 | ) |
| Total Stockholders’ Equity                                                                                          |   |         | 71,104,927  |   |   |   | 68,189,849 |   |
|                                                                                                                      |   |         |        |   |   |   |   |   |
| Total Liabilities and Stockholders' Equity                                                                                |   | $            | 885,936,102 |   |   | $ | 815,042,534 |   |

----

|                                                                          |   | Years Ended December 31, |       |
|-------------------------------------------------------------------------------|--------|--------------------------|------------|
|                                                                          |   | 2010                     |       |   | 2009 |   |
| Interest and Dividend Income                                                  |   |                     |       |   |   |   |
| Loans, including fees                                                         |   | $                        | 34,995,425 |   |   | $ | 32,685,178 |   |
| Taxable interest and dividends on investment securities                       |   |                     | 4,524,204  |   |   |   | 5,180,535 |   |
| Interest on deposits with banks                                               |   |                     | 17,358     |   |   |   | 21,640 |   |
| Total Interest and Dividend Income                                            |   |                     | 39,536,987 |   |   |   | 37,887,353 |   |
|                                                                          |   |                     |       |   |   |   |   |   |
| Interest Expenses                                                             |   |                     |       |   |   |   |   |   |
| Deposits                                                                      |   |                     | 10,938,385 |   |   |   | 12,230,667 |   |
| Short-term borrowings                                                         |   |                     | 42,151     |   |   |   | 29,330 |   |
| Long-term debt                                                                |   |                     | 2,599,679  |   |   |   | 3,906,131 |   |
| Total Interest Expenses                                                       |   |                     | 13,580,215 |   |   |   | 16,166,128 |   |
|                                                                          |   |                     |       |   |   |   |   |   |
| Net Interest Income                                                           |   |                     | 25,956,772 |   |   |   | 21,721,225 |   |
| Provision for loan losses                                                     |   |                     | 3,933,448  |   |   |   | 3,472,608 |   |
| Net Interest Income After Provision For Loan Losses                           |   |                     | 22,023,324 |   |   |   | 18,248,617 |   |
|                                                                          |   |                     |       |   |   |   |   |   |
| Noninterest Income                                                            |   |                     |       |   |   |   |   |   |
| Recognition of other than temporary decline in value of investment securities |   |                     | -          |   |   |   | (538,614 | ) |
| Less: portion recorded as comprehensive income                                |   |                     | -          |   |   |   | 271,870 |   |
| Impairment loss on investment securities, net                                 |   |                     | -          |   |   |   | (266,744 | ) |
| Loan appraisal, credit, and miscellaneous charges                             |   |                     | 676,805    |   |   |   | 688,101 |   |
| Income from bank owned life insurance                                         |   |                     | 504,296    |   |   |   | 417,110 |   |
| Service charges                                                               |   |                     | 1,905,949  |   |   |   | 1,658,544 |   |
| Gain on sale of asset                                                         |   |                     | 22,500     |   |   |   | - |   |
| Gain on sale of loans held for sale                                           |   |                     | 470,626    |   |   |   | 325,671 |   |
| Loss on the sale of investment securities                                     |   |                     | -          |   |   |   | (12,863 | ) |
| Total Noninterest Income                                                      |   |                     | 3,580,176  |   |   |   | 2,809,819 |   |
|                                                                          |   |                     |       |   |   |   |   |   |
| Noninterest Expenses                                                          |   |                     |       |   |   |   |   |   |
| Salary and employee benefits                                                  |   |                     | 9,769,401  |   |   |   | 8,607,141 |   |
| Occupancy expense                                                             |   |                     | 1,772,394  |   |   |   | 1,779,497 |   |
| Advertising                                                                   |   |                     | 399,802    |   |   |   | 449,155 |   |
| Data processing expense                                                       |   |                     | 1,044,972  |   |   |   | 914,250 |   |
| Depreciation of furniture, fixtures, and equipment                            |   |                     | 541,642    |   |   |   | 613,205 |   |
| Telephone communications                                                      |   |                     | 170,566    |   |   |   | 152,649 |   |
| Office supplies                                                               |   |                     | 170,447    |   |   |   | 164,154 |   |
| Professional fees                                                             |   |                     | 799,377    |   |   |   | 749,467 |   |
| FDIC insurance                                                                |   |                     | 1,338,305  |   |   |   | 1,134,926 |   |
| Valuation allowance on foreclosed real estate                                 |   |                     | 287,934    |   |   |   | - |   |
| Other                                                                         |   |                     | 1,900,343  |   |   |   | 2,015,234 |   |
| Total Noninterest Expenses                                                    |   |                     | 18,195,183 |   |   |   | 16,579,678 |   |
|                                                                          |   |                     |       |   |   |   |   |   |
| Income before income taxes                                                    |   |                     | 7,408,317  |   |   |   | 4,478,758 |   |
| Income tax expense                                                            |   |                     | 2,642,616  |   |   |   | 1,611,668 |   |
| Net Income                                                                    |   | $                        | 4,765,701  |   |   | $ | 2,867,090 |   |
| Preferred stock dividends                                                     |   |                     | 846,930    |   |   |   | 846,930 |   |
| Net Income Available to Common Shareholders                                   |   | $                        | 3,918,771  |   |   | $ | 2,020,160 |   |
|                                                                          |   |                     |       |   |   |   |   |   |
| Earnings Per Common Share                                                     |   |                     |       |   |   |   |   |   |
| Basic                                                                         |   | $                        | 1.31       |   |   | $ | 0.68 |   |
| Diluted                                                                       |   | $                        | 1.30       |   |   | $ | 0.68 |   |
| Cash dividend paid per common share                                           |   | $                        | 0.40       |   |   | $ | 0.40 |   |

----

|                                                                                |   |      |       |   |   |    |   |     |       | Accumulated   |   |       |   |   |     |
|-------------------------------------------------------------------------------------|--------|-----------|------------|--------|--------|---------|--------|----------|------------|---------------|--------|------------|--------|--------|----------|
|                                                                                |   |      |       |   |   |    |   |     |       | Other         |   | Unearned   |   |   |     |
|                                                                                |   | Preferred |       | Common |   | Paid-in |   | Retained |       | Comprehensive |   | ESOP       |   |   |     |
|                                                                                |   | Stock     |       | Stock  |   | Capital |   | Earnings |       | Income (Loss) |   | Shares     |   | Total  |     |
|                                                                                |   |      |       |   |   |    |   |     |       |          |   |       |   |   |     |
| Balance at January 1, 2009                                                          |   | $         | 16,317,000 |   | $      | 29,478  |   | $        | 16,517,649 |          | $      | 34,280,719 |   | $      | 229,848  |   | $ | (260,275 | ) | $ | 67,114,419 |   |
|                                                                                |   |      |       |   |   |    |   |     |       |          |   |       |   |   |     |   |   |   |   |   |   |   |
| Comprehensive Income                                                                |   |      |       |   |   |    |   |     |       |          |   |       |   |   |     |   |   |   |   |   |   |   |
| Net Income                                                                          |   |      |       |   |   |    |   |     |       |          |   | 2,867,090  |   |   |     |   |   |   |   |   | 2,867,090 |   |
| Unrealized holding gains on investment securities  net of tax of $120,577 |   |      |       |   |   |    |   |     |       |          |   |       |   |   | 234,060  |   |   |   |   |   | 234,060 |   |
| Other than temporary impairment on HTM  securities net of tax of $92,436  |   |      |       |   |   |    |   |     |       |          |   |       |   |   | (179,434 | ) |   |   |   |   | (179,434 | ) |
| Total Comprehensive Income                                                          |   |      |       |   |   |    |   |     |       |          |   |       |   |   |     |   |   |   |   |   | 2,921,716 |   |
|                                                                                |   |      |       |   |   |    |   |     |       |          |   |       |   |   |     |   |   |   |   |   |   |   |
| Cash dividend  $0.40 per share                                            |   |      |       |   |   |    |   |     |       |          |   | (1,186,907 | )      |   |     |   |   |   |   |   | (1,186,907 | ) |
| Preferred stock dividends                                                           |   |      |       |   |   |    |   |     |       |          |   | (766,944   | )      |   |     |   |   |   |   |   | (766,944 | ) |
| Exercise of stock options                                                           |   |      |       |   |   | 174     |   |     | 122,134    |          |   |       |   |   |     |   |   |   |   |   | 122,308 |   |
| Net change in unearned ESOP shares                                                  |   |      |       |   |   | 24      |   |     | 1          |          |   |       |   |   |     |   |   | (129,695 | ) |   | (129,670 | ) |
| Stock-based compensation                                                            |   |      |       |   |   | 84      |   |     | 99,896     |          |   |       |   |   |     |   |   |   |   |   | 99,980 |   |
| Tax effect of the exercise of stock-based  compensation                   |   |      | -          |   |   | -       |   |     | 14,947     |          |   | -          |   |   | -        |   |   | - |   |   | 14,947 |   |
| Balance at December 31, 2009                                                        |   |      | 16,317,000 |   |   | 29,760  |   |     | 16,754,627 |          |   | 35,193,958 |   |   | 284,474  |   |   | (389,970 | ) |   | 68,189,849 |   |
|                                                                                |   |      |       |   |   |    |   |     |       |          |   |       |   |   |     |   |   |   |   |   |   |   |
| Comprehensive Income                                                                |   |      |       |   |   |    |   |     |       |          |   |       |   |   |     |   |   |   |   |   |   |   |
| Net Income                                                                          |   |      |       |   |   |    |   |     |       |          |   | 4,765,701  |   |   |     |   |   |   |   |   | 4,765,701 |   |
| Unrealized holding gains on investment securities  net of tax of $61,452  |   |      |       |   |   |    |   |     |       |          |   |       |   |   | 119,463  |   |   |   |   |   | 119,463 |   |
| Other than temporary impairment amortization on HTM securities net of tax of $3,735 |   |      |       |   |   |    |   |     |       |          |   |       |   |   | 7,251    |   |   |   |   |   | 7,251 |   |
| Total Comprehensive Income                                                          |   |      |       |   |   |    |   |     |       |          |   |       |   |   |     |   |   |   |   |   | 4,892,415 |   |
|                                                                                |   |      |       |   |   |    |   |     |       |          |   |       |   |   |     |   |   |   |   |   |   |   |
| Cash dividend  $0.40 per share                                            |   |      |       |   |   |    |   |     |       |          |   | (1,196,187 | )      |   |     |   |   |   |   |   | (1,196,187 | ) |
| Preferred stock dividends                                                           |   |      |       |   |   |    |   |     |       |          |   | (846,930   | )      |   |     |   |   |   |   |   | (846,930 | ) |
| Exercise of stock options                                                           |   |      |       |   |   | 237     |   |     | 147,562    |          |   |       |   |   |     |   |   |   |   |   | 147,799 |   |
| Net change in unearned ESOP shares                                                  |   |      |       |   |   | 44      |   |     |       |          |   |       |   |   |     |   |   | (118,334 | ) |   | (118,290 | ) |
| Repurchase of common stock                                                          |   |      |       |   |   | (15     | )      |     |       |          |   | (23,985    | )      |   |     |   |   |   |   |   | (24,000 | ) |
| Tax effect of ESOP dividend                                                         |   |      |       |   |   |    |   |     | 55,713     |          |   |       |   |   |     |   |   |   |   |   | 55,713 |   |
| Tax effect of  Non-ISO shares                                             |   |      | -          |   |   | -       |   |     | 4,558      |          |   | -          |   |   | -        |   |   | - |   |   | 4,558 |   |
| Balance at December 31, 2010                                                        |   | $         | 16,317,000 |   | $      | 30,026  |   | $        | 16,962,460 |          | $      | 37,892,557 |   | $      | 411,188  |   | $ | (508,304 | ) | $ | 71,104,927 |   |

----

|                                                                                             |   | 2010   |             |   | 2009   |   |
|--------------------------------------------------------------------------------------------------|--------|--------|------------------|--------|--------|--------|
|                                                                                             |   |   |             |   |   |   |
| Cash Flows from Operating Activities                                                             |   |   |             |   |   |   |
| Net income                                                                                       |   | $      | 4,765,701        |   |   | $      | 2,867,090 |   |
| Adjustments to reconcile net income to net cash provided by operating activities                 |   |   |             |   |   |   |   |   |
| Provision for loan losses                                                                        |   |   | 3,933,448        |   |   |   | 3,472,608 |   |
| Depreciation and amortization                                                                    |   |   | 1,042,610        |   |   |   | 1,188,060 |   |
| Loans originated for resale                                                                      |   |   | (14,248,912      | )      |   |   | (20,994,916 | ) |
| Proceeds from sale of loans held for sale                                                        |   |   | 14,653,649       |   |   |   | 21,022,010 |   |
| Gain on sale of loans held for sale                                                              |   |   | (470,626         | )      |   |   | (325,671 | ) |
| Gain on sale of asset                                                                            |   |   | (22,500          | )      |   |   | - |   |
| Loss on sales of investment securities                                                           |   |   | -                |   |   |   | 12,863 |   |
| Other than temporary decline in market value of investment securities                            |   |   | -                |   |   |   | 266,744 |   |
| Net amortization of premium/discount on mortgage backed securities and investments               |   |   | (177,420         | )      |   |   | (204,963 | ) |
| Increase in foreclosed real estate valuation allowance                                           |   |   | 287,934          |   |   |   | - |   |
| Increase in cash surrender of bank owned life insurance                                          |   |   | (504,296         | )      |   |   | (417,110 | ) |
| Deferred income tax benefit                                                                      |   |   | (761,235         | )      |   |   | (1,659,534 | ) |
| Decrease in accrued interest receivable                                                          |   |   | 140,875          |   |   |   | 40,542 |   |
| (Decrease) Increase in deferred loan fees                                                        |   |   | (38,265          | )      |   |   | 663,560 |   |
| Increase (Decrease) in accounts payable, accrued expenses and other liabilities                  |   |   | 1,124,647        |   |   |   | (233,394 | ) |
| Increase in other assets                                                                         |   |   | (898,148         | )      |   |   | (3,523,305 | ) |
|                                                                                             |   |   |             |   |   |   |   |   |
| Net Cash Provided by Operating Activities                                                        |   |   | 8,827,462        |   |   |   | 2,174,584 |   |
|                                                                                             |   |   |             |   |   |   |   |   |
| Cash Flows from Investing Activities                                                             |   |   |             |   |   |   |   |   |
| Purchase of investment securities available for sale                                             |   |   | (129,159         | )      |   |   | (43,335,182 | ) |
| Proceeds from sale, redemption or principal payments of investment securities available for sale |   |   |  19,522,952 |   |   |   |  4,060,261 |   |
| Purchase of investment securities held to maturity                                               |   |   | (93,208,717      | )      |   |   | (8,377,442 | ) |
| Proceeds from maturities or principal payments of investment securities held to maturity         |   |   | 56,463,705       |   |   |   |  26,380,529 |   |
| Net decrease (increase) of FHLB and Federal Reserve stock                                        |   |   | 619,900          |   |   |   | (482,500 | ) |
| Loans originated or acquired                                                                     |   |   | (244,552,180     | )      |   |   | (274,171,579 | ) |
| Principal collected on loans                                                                     |   |   | 193,319,561      |   |   |   | 195,795,216 |   |
| Purchase of bank owned life insurance policies                                                   |   |   | (6,000,000       | )      |   |   | - |   |
| Proceeds from disposal of asset                                                                  |   |   | 22,500           |   |   |   | - |   |
| Purchase of premises and equipment                                                               |   |   | (1,187,061       | )      |   |   | (939,751 | ) |
|                                                                                             |   |   |             |   |   |   |   |   |
| Net Cash Used in Investing Activities                                                            |   |   | (75,128,499      | )      |   |   | (101,070,448 | ) |

----

|                                                         |   | 2010   |        |   | 2009   |   |
|--------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
|                                                         |   |   |        |   |   |   |
| Cash Flows from Financing Activities                         |   |   |        |   |   |   |
| Net increase in deposits                                     |   | $      | 84,163,537  |   |   | $      | 115,251,223 |   |
| Proceeds from long-term borrowings                           |   |   | 15,000,000  |   |   |   | 750,000 |   |
| Payments of long-term borrowings                             |   |   | (20,045,586 | )      |   |   | (30,043,801 | ) |
| Net (decrease) increase in short-term borrowings             |   |   | (12,264,108 | )      |   |   | 11,558,163 |   |
| Exercise of stock options                                    |   |   | 147,799     |   |   |   | 222,288 |   |
| Excess tax benefits on stock based compensation              |   |   | 4,558       |   |   |   | 14,947 |   |
| Dividends paid                                               |   |   | (2,043,117  | )      |   |   | (1,953,851 | ) |
| Net change in unearned ESOP shares                           |   |   | (62,577     | )      |   |   | (129,670 | ) |
| Redemption of common stock                                   |   |   | (24,000     | )      |   |   | - |   |
|                                                         |   |   |        |   |   |   |   |   |
| Net Cash Provided by Financing Activities                    |   |   | 64,876,506  |   |   |   | 95,669,299 |   |
|                                                         |   |   |        |   |   |   |   |   |
| Decrease in Cash and Cash Equivalents                        |   |   | (1,424,531  | )      |   |   | (3,226,565 | ) |
|                                                         |   |   |        |   |   |   |   |   |
| Cash and Cash Equivalents - January 1                        |   |   | 11,247,967  |   |   |   | 14,474,532 |   |
|                                                         |   |   |        |   |   |   |   |   |
| Cash and Cash Equivalents - December 31                      |   | $      | 9,823,436   |   |   | $      | 11,247,967 |   |
|                                                         |   |   |        |   |   |   |   |   |
| Supplemental Disclosures of Cash Flow Information            |   |   |        |   |   |   |   |   |
| Cash paid during the year for:                               |   |   |        |   |   |   |   |   |
| Interest                                                     |   | $      | 13,808,041  |   |   | $      | 17,660,936 |   |
| Income taxes                                                 |   | $      | 4,597,711   |   |   | $      | 2,797,865 |   |
|                                                         |   |   |        |   |   |   |   |   |
| Supplemental Schedule of Non-Cash Operating Activities       |   |   |        |   |   |   |   |   |
| Issuance of common stock for payment of accrued compensation |   | $      | -           |   |   | $      | 99,980 |   |
| Transfer of loans to foreclosed real estate                  |   | $      | 11,480,843  |   |   | $      | 922,934 |   |

----

----

----

----

----

|                                                                  |   | Years Ended December 31, |      |
|-----------------------------------------------------------------------|--------|--------------------------|-----------|
|                                                                  |   | 2010                     |      |   | 2009 |   |
| Net Income                                                            |   | $                        | 4,765,701 |   |   | $ | 2,867,090 |   |
| Less: dividends paid and accrued on preferred stock                   |   |                     | (846,930  | ) |   |   | (846,930 | ) |
| Net income available to common shareholders                           |   | $                        | 3,918,771 |   |   | $ | 2,020,160 |   |
|                                                                  |   |                     |      |   |   |   |   |   |
| Average number of common shares outstanding                           |   |                     | 2,985,080 |   |   |   | 2,961,293 |   |
| Effect of dilutive options                                            |   |                     | 23,199    |   |   |   | 26,608 |   |
|                                                                  |   |                     |      |   |   |   |   |   |
| Average number of shares used to calculate diluted earnings per share |   |                     | 3,008,279 |   |   |   |  2,987,901 |   |

----

----

----

----

| Description of Asset         |   | Fair Value |       |   | Quoted Prices inActive Markets forIdentical Assets(Level 1) |   |   | Significant OtherObservable Inputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |
|----------------------------------------|--------|-----------------|------------|--------|-------------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------|--------|--------|---------------------------------------------|--------|
|                                   |   |            |       |   |                                                                                      |   |   |                                                       |   |   |                                        |   |
| Available for sale securities:         |   |            |       |   |                                                                                      |   |   |                                                       |   |   |                                        |   |
| Asset-backed securities issued by GSEs |   |            |       |   |                                                                                      |   |   |                                                       |   |   |                                        |   |
| CMOs                                   |   | $               | 27,584,731 |   |                                                                                      | $      | -      |                                                       |   | $      | 27,584,731                                  |   |   | $ | - |   |
| MBS                                    |   |            | 3,504,215  |   |                                                                                      |   | -      |                                                       |   |   | 3,504,215                                   |   |   |   | - |   |
| Corporate equity securities            |   |            | 37,390     |   |                                                                                      |   | -      |                                                       |   |   | 37,390                                      |   |   |   | - |   |
| Bond mutual funds                      |   |            | 3,819,889  |   |                                                                                      |   | -      |                                                       |   |   | 3,819,889                                   |   |   |   | - |   |
| Total available for sale securities    |   | $               | 34,946,225 |   |                                                                                      | $      | -      |                                                       |   | $      | 34,946,225                                  |   |   | $ | - |   |

----

| Description of Asset |   | Fair Value |       |   | Quoted Prices inActive Markets forIdentical Assets(Level 1) |   |   | Significant OtherObservable Inputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |
|--------------------------------|--------|-----------------|------------|--------|-------------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------|--------|--------|---------------------------------------------|--------|
|                           |   |            |       |   |                                                                                      |   |   |                                                       |   |   |                                        |   |
| Loans with Impairment:         |   |            |       |   |                                                                                      |   |   |                                                       |   |   |                                        |   |
| Commercial real estate         |   | $               | 4,742,982  |   |                                                                                      | $      | -      |                                                       |   | $      | 4,742,982                                   |   |   | $ | - |   |
| Commercial loans               |   |            | 4,647,399  |   |                                                                                      |   | -      |                                                       |   |   | 4,647,399                                   |   |   |   | - |   |
| Total loans with impairment    |   | $               | 9,390,381  |   |                                                                                      | $      | -      |                                                       |   | $      | 9,390,381                                   |   |   | $ | - |   |
|                           |   |            |       |   |                                                                                      |   |   |                                                       |   |   |                                        |   |   |   |   |   |
| Foreclosed Real Estate         |   | $               | 10,469,302 |   |                                                                                      | $      | -      |                                                       |   | $      | 10,469,302                                  |   |   | $ | - |   |

----

|                                   |   | December 31, 2010 |        |
|----------------------------------------|--------|-----------------------------|-------------|
|                                   |   | Amortized                   |        |   | Gross Unrealized |   |   | Gross Unrealized |   |   | Estimated |   |
|                              |   | Cost                        |        |   | Gains |   |   | Losses |   |   | Fair Value |   |
| Securities available for sale (AFS)    |   |                        |        |   |   |   |   |   |   |   |   |   |
| Asset-backed securities issued by GSEs |   | $                           | 30,327,808  |   |   | $ | 761,138 |   |   | $ | - |   |   | $ | 31,088,946 |   |
| Corporate equity securities            |   |                        | 37,310      |   |   |   | 80 |   |   |   | - |   |   |   | 37,390 |   |
| Bond mutual funds                      |   |                        | 3,697,208   |   |   |   | 122,681 |   |   |   | - |   |   |   | 3,819,889 |   |
| Total securities available for sale    |   | $                           | 34,062,326  |   |   | $ | 883,899 |   |   | $ | - |   |   | $ | 34,946,225 |   |
|                                   |   |                        |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities held to maturity (HTM)      |   |                        |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Asset-backed securities issued by:     |   |                        |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| GSEs                                   |   | $                           | 113,772,011 |   |   | $ | 1,761,809 |   |   | $ | 782,270 |   |   | $ | 114,751,550 |   |
| Other                                  |   |                        | 12,463,500  |   |   |   | 132,928 |   |   |   | 1,709,386 |   |   |   | 10,887,042 |   |
| Total debt securities held to maturity |   |                        | 126,235,511 |   |   |   | 1,894,737 |   |   |   | 2,491,656 |   |   |   | 125,638,592 |   |
|                                   |   |                        |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government obligations            |   |                        | 752,805     |   |   |   | - |   |   |   | - |   |   |   | 752,805 |   |
| Other investments                      |   |                        | -           |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total securities held to maturity      |   | $                           | 126,988,316 |   |   | $ | 1,894,737 |   |   | $ | 2,491,656 |   |   | $ | 126,391,397 |   |
|                                   |   |                        |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                   |   | December 31, 2009           |        |
|                                   |   | Amortized                   |        |   | Gross Unrealized |   |   | Gross Unrealized |   |   | Estimated |   |
|                                   |   | Cost                        |        |   | Gains |   |   | Losses |   |   | Fair Value |   |
| Securities available for sale (AFS)    |   |                        |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Asset-backed securities issued by GSEs |   | $                           | 49,617,856  |   |   | $ | 646,198 |   |   | $ | 30,628 |   |   | $ | 50,233,426 |   |
| Corporate equity securities            |   |                        | 37,310      |   |   |   | 1,416 |   |   |   | 163 |   |   |   | 38,563 |   |
| Bond mutual funds                      |   |                        | 3,568,050   |   |   |   | 86,070 |   |   |   | - |   |   |   | 3,654,120 |   |
| Total securities available for sale    |   | $                           | 53,223,216  |   |   | $ | 733,684 |   |   | $ | 30,791 |   |   | $ | 53,926,109 |   |
|                                   |   |                        |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities held to maturity (HTM)      |   |                        |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Asset-backed securities issued by:     |   |                        |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| GSEs                                   |   | $                           | 71,276,709  |   |   | $ | 1,689,252 |   |   | $ | 137,919 |   |   | $ | 72,828,042 |   |
| Other                                  |   |                        | 19,005,847  |   |   |   | 12,088 |   |   |   | 3,353,964 |   |   |   | 15,663,971 |   |
| Total debt securities held to maturity |   |                        | 90,282,556  |   |   |   | 1,701,340 |   |   |   | 3,491,883 |   |   |   | 88,492,013 |   |
|                                   |   |                        |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government obligations            |   |                        | -           |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Other investments                      |   |                        | 5,247       |   |   |   | - |   |   |   | - |   |   |   | 5,247 |   |
| Total securities held to maturity      |   | $                           | 90,287,803  |   |   | $ | 1,701,340 |   |   | $ | 3,491,883 |   |   | $ | 88,497,260 |   |

----

|                                    |   | Continuous unrealized losses existing for |       |
|-----------------------------------------|--------|---------------------------------------------------------------|------------|
|                                    |   | Less Than 12                                        |       |   | More Than 12 |   |   |   |   |   |   |   |
|                                    |   | Months                                                        |       |   | Months |   |   | Total |   |
|                                    |   | Fair Value                                               |       |   | UnrealizedLoss |   |   | Fair Value |   |   | UnrealizedLoss |   |   | Fair Value |   |   | UnrealizedLosses |   |
|                                    |   |                                                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Asset-backed securities issued by GSEs  |   | $                                                             | 37,344,330 |   |   | $ | 782,192 |   |   | $ | 200,072 |   |   | $ | 78 |   |   | $ | 37,544,402 |   |   | $ | 782,270 |   |
|                                    |   |                                                          |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Asset-backed securities issued by other |   |                                                          | -          |   |   |   | - |   |   |   | 8,573,411 |   |   |   | 1,709,386 |   |   |   | 8,573,411 |   |   |   | 1,709,386 |   |
|                                    |   | $                                                             | 37,344,330 |   |   | $ | 782,192 |   |   | $ | 8,773,483 |   |   | $ | 1,709,465 |   |   | $ | 46,117,813 |   |   | $ | 2,491,656 |   |

----

|                              |   | Available for Sale |       |   | Held to Maturity |   |
|-----------------------------------|--------|--------------------|------------|--------|------------------|--------|
|                              |   |               |       |   | Estimated        |   |   |   |   |   | Estimated |   |
|                              |   | Amortized          |       |   | Fair             |   |   | Amortized |   |   | Fair |   |
|                              |   | Cost               |       |   | Value            |   |   | Cost |   |   | Value |   |
|  Within one year             |   | $                  | 3,697,208  |   |             | $      | 3,819,889 |   |   | $ | 752,805 |   |   | $ | 752,805 |   |
|                              |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Asset-backed securites            |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Within one year                   |   |               | 11,468,202 |   |             |   | 11,756,020 |   |   |   | 36,223,185 |   |   |   | 36,051,899 |   |
| Over one year through five years  |   |               | 12,903,862 |   |             |   | 13,227,711 |   |   |   | 61,310,285 |   |   |   | 61,020,372 |   |
| Over five years through ten years |   |               | 4,326,438  |   |             |   | 4,435,019 |   |   |   | 21,990,416 |   |   |   | 21,886,432 |   |
| After ten years                   |   |               | 1,629,306  |   |             |   | 1,670,196 |   |   |   | 6,711,625 |   |   |   | 6,679,889 |   |
| Total asset-backed securities     |   |               | 30,327,808 |   |             |   | 31,088,946 |   |   |   | 126,235,511 |   |   |   | 125,638,592 |   |
|                              |   |               |       |   |             |   |   |   |   |   |   |   |   |   |   |   |
|                              |   | $                  | 34,025,016 |   |             | $      | 34,908,835 |   |   | $ | 126,988,316 |   |   | $ | 126,391,397 |   |

| Credit Rating |   | Amount |        |
|---------------|--------|--------|-------------|
| AAA           |   | $      | 148,916,364 |   |
| AA+           |   |   | 404,077     |   |
| AA-           |   |   | 2,121,938   |   |
| A-            |   |   | 1,147,286   |   |
| BBB+          |   |   | 104,005     |   |
| BBB-          |   |   | 805,668     |   |
| B+            |   |   | 657,727     |   |
| CCC+          |   |   | 3,167,392   |   |
| Total         |   | $      | 157,324,457 |   |

----

|                              |   | Years Ended December 31, |        |
|-----------------------------------|--------|--------------------------|-------------|
|                              |   | 2010                     |        |   | 2009 |   |
|                              |   |                     |        |   |   |   |
| Commercial real estate            |   | $                        | 336,299,836 |   |   | $ | 292,987,963 |   |
| Residential first mortgages       |   |                     | 136,048,577 |   |   |   | 116,225,733 |   |
| Construction and land development |   |                     | 42,504,200  |   |   |   | 62,509,558 |   |
| Home equity and second mortgage   |   |                     | 24,379,664  |   |   |   | 25,133,155 |   |
| Commercial loans                  |   |                     | 104,566,261 |   |   |   | 108,657,910 |   |
| Consumer loans                    |   |                     | 1,273,080   |   |   |   | 1,607,765 |   |
| Commercial equipment              |   |                     | 17,983,648  |   |   |   | 17,916,655 |   |
|                              |   |                     | 663,055,266 |   |   |   | 625,038,739 |   |
| Less:                             |   |                     |        |   |   |   |   |   |
| Deferred loan fees                |   |                     | 936,183     |   |   |   | 974,449 |   |
| Allowance for loan loss           |   |                     | 7,669,147   |   |   |   | 7,471,314 |   |
|                              |   |                     | 8,605,330   |   |   |   | 8,445,763 |   |
|                              |   |                     |        |   |   |   |   |   |
|                              |   | $                        | 654,449,936 |   |   | $ | 616,592,976 |   |

----

| 2010                                                  |   | CommercialReal Estate |        |   | ResidentialFirstMortgage |   |        | Constructionand LandDevelopment |   |   | HomeEquity andSecond Mtg. |   |   | CommercialLoans |       |   | ConsumerLoans |   |        | CommercialEquipment |   |   | Total     |   |
|-------------------------------------------------------|--------|----------------------------|-------------|--------|--------------------------|--------|-------------|--------------------------------------|--------|--------|-------------------------------------|--------|--------|-----------------|------------|--------|---------------|--------|-------------|---------------------|--------|--------|-----------|--------|
| Allowance for loan losses:                            |   |                       |        |   |                     |   |        |                                 |   |   |                                |   |   |            |       |   |          |   |        |                |   |   |      |   |
| Balance at January 1,                                 |   | $                          | 2,661,371   |   |                     | $      | 127,848     |                                 |   | $      | 1,696,396                           |   |   | $               | 130,692    |   |          | $      | 2,109,513   |                |   | $      | 63,989    |   |   | $ | 681,505 |   |   | $ | 7,471,314 |   |
| Charge-offs                                           |   |                       | (525,992    | )      |                     |   | (62,999     | )                                    |   |   | (2,248,967                          | )      |   |            | (70,999    | )      |          |   | (568,992    | )                   |   |   | (10,000   | )      |   |   | (255,996 | ) |   |   | (3,743,945 | ) |
| Recoveries                                            |   |                       | -           |   |                     |   | -           |                                 |   |   | 1,041                               |   |   |            | -          |   |          |   | -           |                |   |   | 7,289     |   |   |   | - |   |   |   | 8,330 |   |
| Provisions                                            |   |                       | 1,178,604   |   |                     |   | 139,224     |                                 |   |   | 1,818,155                           |   |   |            | 37,826     |   |          |   | 1,011,518   |                |   |   | (29,069   | )      |   |   | (222,810 | ) |   |   | 3,933,448 |   |
| Balance at December 31,                               |   | $                          | 3,313,983   |   |                     | $      | 204,073     |                                 |   | $      | 1,266,625                           |   |   | $               | 97,519     |   |          | $      | 2,552,039   |                |   | $      | 32,209    |   |   | $ | 202,699 |   |   | $ | 7,669,147 |   |
|                                                  |   |                       |        |   |                     |   |        |                                 |   |   |                                |   |   |            |       |   |          |   |        |                |   |   |      |   |   |   |   |   |   |   |   |   |
| Ending balance: individually evaluated for impairment |   | $                          | 500,000     |   |                     | $      | -           |                                 |   | $      | -                                   |   |   | $               | -          |   |          | $      | 1,449,179   |                |   | $      | -         |   |   | $ | 48,456 |   |   | $ | 1,997,635 |   |
|                                                  |   |                       |        |   |                     |   |        |                                 |   |   |                                |   |   |            |       |   |          |   |        |                |   |   |      |   |   |   |   |   |   |   |   |   |
| Ending balance: collectively evaluated for impairment |   | $                          | 2,813,983   |   |                     | $      | 204,073     |                                 |   | $      | 1,266,625                           |   |   | $               | 97,519     |   |          | $      | 1,102,860   |                |   | $      | 32,209    |   |   | $ | 154,243 |   |   | $ | 5,671,512 |   |
| Loan receivables:                                     |   |                       |        |   |                     |   |        |                                 |   |   |                                |   |   |            |       |   |          |   |        |                |   |   |      |   |   |   |   |   |   |   |   |   |
| Ending balance                                        |   | $                          | 336,299,836 |   |                     | $      | 136,048,577 |                                 |   | $      | 42,504,200                          |   |   | $               | 24,379,664 |   |          | $      | 104,566,261 |                |   | $      | 1,273,080 |   |   | $ | 17,983,648 |   |   | $ | 663,055,266 |   |
|                                                  |   |                       |        |   |                     |   |        |                                 |   |   |                                |   |   |            |       |   |          |   |        |                |   |   |      |   |   |   |   |   |   |   |   |   |
| Ending balance: individually evaluated for impairment |   | $                          | 20,800,730  |   |                     | $      | 3,664,442   |                                 |   | $      | 12,221,463                          |   |   | $               | 319,112    |   |          | $      | 19,991,537  |                |   | $      | 701       |   |   | $ | 319,770 |   |   | $ | 57,317,755 |   |
|                                                  |   |                       |        |   |                     |   |        |                                 |   |   |                                |   |   |            |       |   |          |   |        |                |   |   |      |   |   |   |   |   |   |   |   |   |
| Ending balance: collectively evaluated for impairment |   | $                          | 315,499,106 |   |                     | $      | 132,384,135 |                                 |   | $      | 30,282,737                          |   |   | $               | 24,060,552 |   |          | $      | 84,574,724  |                |   | $      | 1,272,379 |   |   | $ | 17,663,878 |   |   | $ | 605,737,511 |   |

| 2009                                                  |   | CommercialReal Estate |        |   | ResidentialFirstMortgage |   |        | Constructionand LandDevelopment |   |   | HomeEquity andSecond Mtg. |   |   | CommercialLoans |       |   | ConsumerLoans |   |        | CommercialEquipment |   |   | Total     |   |
|-------------------------------------------------------|--------|----------------------------|-------------|--------|--------------------------|--------|-------------|--------------------------------------|--------|--------|-------------------------------------|--------|--------|-----------------|------------|--------|---------------|--------|-------------|---------------------|--------|--------|-----------|--------|
| Allowance for loan losses:                            |   |                       |        |   |                     |   |        |                                 |   |   |                                |   |   |            |       |   |          |   |        |                |   |   |      |   |
| Balance at January 1,                                 |   | $                          | 2,008,872   |   |                     | $      | 104,993     |                                 |   | $      | 1,294,918                           |   |   | $               | 101,994    |   |          | $      | 1,247,921   |                |   | $      | 42,997    |   |   | $ | 343,978 |   |   | $ | 5,145,673 |   |
| Charge-offs                                           |   |                       | -           |   |                     |   | -           |                                 |   |   | (187,395                            | )      |   |            | (98,225    | )      |          |   | (606,313    | )                   |   |   | (31,933   | )      |   |   | (223,201 | ) |   |   | (1,147,067 | ) |
| Recoveries                                            |   |                       | -           |   |                     |   | -           |                                 |   |   | -                                   |   |   |            | -          |   |          |   | -           |                |   |   | 99        |   |   |   | - |   |   |   | 99 |   |
| Provisions                                            |   |                       | 652,499     |   |                     |   | 22,855      |                                 |   |   | 588,873                             |   |   |            | 126,923    |   |          |   | 1,467,905   |                |   |   | 52,826    |   |   |   | 560,728 |   |   |   | 3,472,608 |   |
| Balance at December 31,                               |   | $                          | 2,661,371   |   |                     | $      | 127,848     |                                 |   | $      | 1,696,396                           |   |   | $               | 130,692    |   |          | $      | 2,109,513   |                |   | $      | 63,989    |   |   | $ | 681,505 |   |   | $ | 7,471,314 |   |
|                                                  |   |                       |        |   |                     |   |        |                                 |   |   |                                |   |   |            |       |   |          |   |        |                |   |   |      |   |   |   |   |   |   |   |   |   |
| Ending balance: individually evaluated for impairment |   | $                          | 50,000      |   |                     | $      | -           |                                 |   | $      | 404,600                             |   |   | $               | -          |   |          | $      | 882,745     |                |   | $      | -         |   |   | $ | 500,000 |   |   | $ | 1,837,345 |   |
|                                                  |   |                       |        |   |                     |   |        |                                 |   |   |                                |   |   |            |       |   |          |   |        |                |   |   |      |   |   |   |   |   |   |   |   |   |
| Ending balance: collectively evaluated for impairment |   | $                          | 2,611,371   |   |                     | $      | 127,848     |                                 |   | $      | 1,291,796                           |   |   | $               | 130,692    |   |          | $      | 1,226,768   |                |   | $      | 63,989    |   |   | $ | 181,505 |   |   | $ | 5,633,969 |   |
| Loan receivables:                                     |   |                       |        |   |                     |   |        |                                 |   |   |                                |   |   |            |       |   |          |   |        |                |   |   |      |   |   |   |   |   |   |   |   |   |
| Ending balance                                        |   | $                          | 292,987,963 |   |                     | $      | 116,225,733 |                                 |   | $      | 62,509,558                          |   |   | $               | 25,133,155 |   |          | $      | 108,657,910 |                |   | $      | 1,607,765 |   |   | $ | 17,916,655 |   |   | $ | 625,038,739 |   |
|                                                  |   |                       |        |   |                     |   |        |                                 |   |   |                                |   |   |            |       |   |          |   |        |                |   |   |      |   |   |   |   |   |   |   |   |   |
| Ending balance: individually evaluated for impairment |   | $                          | 13,688,541  |   |                     | $      | 3,098,512   |                                 |   | $      | 16,590,479                          |   |   | $               | 169,103    |   |          | $      | 8,630,272   |                |   | $      | 1,230     |   |   | $ | 5,014,362 |   |   | $ | 47,192,499 |   |
|                                                  |   |                       |        |   |                     |   |        |                                 |   |   |                                |   |   |            |       |   |          |   |        |                |   |   |      |   |   |   |   |   |   |   |   |   |
| Ending balance: collectively evaluated for impairment |   | $                          | 279,299,422 |   |                     | $      | 113,127,221 |                                 |   | $      | 45,919,079                          |   |   | $               | 24,964,052 |   |          | $      | 100,027,638 |                |   | $      | 1,606,535 |   |   | $ | 12,902,293 |   |   | $ | 577,846,240 |   |

----

|                        |   | 2010   |       |
|-----------------------------|--------|--------|------------|
| Balance, beginning of year  |   | $      | 5,509,870  |   |
| New loans made during year  |   |   | 1,796,909  |   |
| Repayments made during year |   |   | (1,056,682 | ) |
|                        |   |   |       |   |
| Balance, end of year        |   | $      | 6,250,097  |   |

|                              |   | Years Ended December 31, |       |
|-----------------------------------|--------|-----------------------------------------|------------|
|                              |   | 2010                                    |       |   | 2009 |   |
|                              |   | Dollars                                 |       |   | Number of Loans |   |   | Dollars |   |   | Number of Loans |   |
|                              |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Commercial real estate            |   | $                                       | 8,244,683  |   |   |   | 12 |   |   | $ | 6,366,672 |   |   |   | 8 |   |
| Residential first mortgages       |   |                                    | 1,746,786  |   |   |   | 6 |   |   |   | 338,806 |   |   |   | 1 |   |
| Construction and land development |   |                                    | 983,867    |   |   |   | 1 |   |   |   | 9,504,414 |   |   |   | 5 |   |
| Home equity and second mortgage   |   |                                    | 232,644    |   |   |   | 5 |   |   |   | - |   |   |   | - |   |
| Commercial loans                  |   |                                    | 2,261,642  |   |   |   | 6 |   |   |   | 2,192,308 |   |   |   | 5 |   |
| Consumer loans                    |   |                                    | 701        |   |   |   | 1 |   |   |   | 22,884 |   |   |   | 2 |   |
| Commercial equipment              |   |                                    | 48,456     |   |   |   | 1 |   |   |   | 862,399 |   |   |   | 3 |   |
|                              |   | $                                       | 13,518,779 |   |   |   | 32 |   |   | $ | 19,287,483 |   |   |   | 24 |   |

----

| December 31, 2010 |   | Current |        |   | 31-60Days |   |      | 61-90Days |   |   | Greaterthan 90Days |   |   | TotalPast Due |       |   | TotalLoanReceivables |   |
|-----------------------------|--------|---------|-------------|--------|-----------|--------|-----------|-----------|--------|--------|-------------------------|--------|--------|--------------------|------------|--------|----------------------|--------|
|                        |   |    |        |   |      |   |      |      |   |   |                    |   |   |               |       |   |                 |   |
| Commercial real estate      |   | $       | 327,358,352 |   |      | $      | 696,801   |      |   | $      | -                       |   |   | $                  | 8,244,683  |   |                 | $      | 8,941,484 |   |   | $ | 336,299,836 |   |
| Residential first mortgages |   |    | 134,142,088 |   |      |   | 159,703   |      |   |   | -                       |   |   |               | 1,746,786  |   |                 |   | 1,906,489 |   |   |   | 136,048,577 |   |
| Construction and land dev.  |   |    | 41,520,333  |   |      |   | -         |      |   |   | -                       |   |   |               | 983,867    |   |                 |   | 983,867 |   |   |   | 42,504,200 |   |
| Home equity and second mtg. |   |    | 23,947,389  |   |      |   | 199,631   |      |   |   | -                       |   |   |               | 232,644    |   |                 |   | 432,275 |   |   |   | 24,379,664 |   |
| Commercial loans            |   |    | 102,221,510 |   |      |   | 83,109    |      |   |   | -                       |   |   |               | 2,261,642  |   |                 |   | 2,344,751 |   |   |   | 104,566,261 |   |
| Consumer loans              |   |    | 1,268,738   |   |      |   | 3,141     |      |   |   | 500                     |   |   |               | 701        |   |                 |   | 4,342 |   |   |   | 1,273,080 |   |
| Commercial equipment        |   |    | 17,935,192  |   |      |   | -         |      |   |   | -                       |   |   |               | 48,456     |   |                 |   | 48,456 |   |   |   | 17,983,648 |   |
| Total                       |   | $       | 648,393,602 |   |      | $      | 1,142,385 |      |   | $      | 500                     |   |   | $                  | 13,518,779 |   |                 | $      | 14,661,664 |   |   | $ | 663,055,266 |   |
|                        |   |    |        |   |      |   |      |      |   |   |                    |   |   |               |       |   |                 |   |   |   |   |   |   |   |
| December 31, 2009           |   | Current |        |   | 31-60Days |   |      | 61-90Days |   |   | Greaterthan 90Days      |   |   | TotalPast Due      |       |   | TotalLoanReceivables |   |
|                        |   |    |        |   |      |   |      |      |   |   |                    |   |   |               |       |   |                 |   |   |   |   |   |   |   |
| Commercial real estate      |   | $       | 286,037,954 |   |      | $      | 466,930   |      |   | $      | 116,407                 |   |   | $                  | 6,366,672  |   |                 | $      | 6,950,009 |   |   | $ | 292,987,963 |   |
| Residential first mortgages |   |    | 115,358,771 |   |      |   | 528,156   |      |   |   | -                       |   |   |               | 338,806    |   |                 |   | 866,962 |   |   |   | 116,225,733 |   |
| Construction and land dev.  |   |    | 52,009,515  |   |      |   | -         |      |   |   | 995,629                 |   |   |               | 9,504,414  |   |                 |   | 10,500,043 |   |   |   | 62,509,558 |   |
| Home equity and second mtg. |   |    | 24,873,478  |   |      |   | 259,677   |      |   |   |                    |   |   |               | -          |   |                 |   | 259,677 |   |   |   | 25,133,155 |   |
| Commercial loans            |   |    | 102,223,293 |   |      |   | 325,555   |      |   |   | 3,916,754               |   |   |               | 2,192,308  |   |                 |   | 6,434,617 |   |   |   | 108,657,910 |   |
| Consumer loans              |   |    | 1,472,300   |   |      |   | 100,196   |      |   |   | 12,385                  |   |   |               | 22,884     |   |                 |   | 135,465 |   |   |   | 1,607,765 |   |
| Commercial equipment        |   |    | 17,054,256  |   |      |   | -         |      |   |   | -                       |   |   |               | 862,399    |   |                 |   | 862,399 |   |   |   | 17,916,655 |   |
| Total                       |   | $       | 599,029,567 |   |      | $      | 1,680,514 |      |   | $      | 5,041,175               |   |   | $                  | 19,287,483 |   |                 | $      | 26,009,172 |   |   | $ | 625,038,739 |   |

----

----

|            |   | Commercial Real Estate |        |   | Construction and Land Dev. |   |
|-----------------|--------|------------------------|-------------|--------|----------------------------|--------|
|            |   | 2010                   |        |   | 2009                       |   |   | 2010 |   |   | 2009 |   |
|            |   |                   |        |   |                       |   |   |   |   |   |   |   |
| Unrated         |   | $                      | 1,074,330   |   |                       | $      | 962,169 |   |   | $ | - |   |   | $ | 635,000 |   |
| Pass            |   |                   | 317,579,637 |   |                       |   | 279,447,944 |   |   |   | 30,274,737 |   |   |   | 45,284,080 |   |
| Special mention |   |                   | 3,628,052   |   |                       |   | 3,346,443 |   |   |   | 1,585,035 |   |   |   | 4,496,641 |   |
| Substandard     |   |                   | 14,017,818  |   |                       |   | 9,231,407 |   |   |   | 10,644,428 |   |   |   | 1,392,018 |   |
| Doubtful        |   |                   | -           |   |                       |   | - |   |   |   | - |   |   |   | 10,701,819 |   |
| Loss            |   |                   | -           |   |                       |   | - |   |   |   | - |   |   |   | - |   |
|            |   |                   |        |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Total           |   | $                      | 336,299,836 |   |                       | $      | 292,987,963 |   |   | $ | 42,504,200 |   |   | $ | 62,509,558 |   |
|            |   |                   |        |   |                       |   |   |   |   |   |   |   |   |   |   |   |
|            |   | Commercial Loans       |        |   | Commercial Equipment       |   |
|            |   |                   | 2010        |   |                       |   | 2009 |   |   |   | 2010 |   |   |   | 2009 |   |
|            |   |                   |        |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Unrated         |   | $                      | 50,035      |   |                       | $      | 527,703 |   |   | $ | 169,492 |   |   | $ | 293,771 |   |
| Pass            |   |                   | 84,946,678  |   |                       |   | 94,704,238 |   |   |   | 17,765,700 |   |   |   | 17,488,030 |   |
| Special mention |   |                   | 2,814,668   |   |                       |   | 2,668,800 |   |   |   | - |   |   |   | - |   |
| Substandard     |   |                   | 12,852,635  |   |                       |   | 6,765,846 |   |   |   | - |   |   |   | 74,658 |   |
| Doubtful        |   |                   | 3,793,470   |   |                       |   | 3,991,323 |   |   |   | 48,456 |   |   |   | 60,196 |   |
| Loss            |   |                   | 108,775     |   |                       |   | - |   |   |   | - |   |   |   | - |   |
|            |   |                   |        |   |                       |   |   |   |   |   |   |   |   |   |   |   |
| Total           |   | $                      | 104,566,261 |   |                       | $      | 108,657,910 |   |   | $ | 17,983,648 |   |   | $ | 17,916,655 |   |

|          |   | Residential First Mortgages |        |   | Home Equity and Second Mtg. |   |        | Consumer Loans |   |
|---------------|--------|---------------------------------------|-------------|--------|-------------------------------------------------|--------|-------------|---------------------|--------|
|          |   | 2010                                  |        |   | 2009                                            |   |        | 2010                |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |
|          |   |                                  |        |   |                                            |   |        |                |   |   |   |   |   |   |   |   |   |   |
| Performing    |   | $                                     | 134,301,791 |   |                                            | $      | 115,886,927 |                |   | $ | 24,147,019 |   |   | $ | 25,133,155 |   |   | $ | 1,272,379 |   |   | $ | 1,584,881 |   |
| Nonperforming |   |                                  | 1,746,786   |   |                                            |   | 338,806     |                |   |   | 232,645 |   |   |   | - |   |   |   | 701 |   |   |   | 22,884 |   |
|          |   |                                  |        |   |                                            |   |        |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total         |   | $                                     | 136,048,577 |   |                                            | $      | 116,225,733 |                |   | $ | 24,379,664 |   |   | $ | 25,133,155 |   |   | $ | 1,273,080 |   |   | $ | 1,607,765 |   |

----

|                        |   | Unpaid      |       |   | Recorded   |   |       | Recorded   |   |   |       |   |   |      |       |   |       |   |      |       |   |
|-----------------------------|--------|-------------|------------|--------|------------|--------|------------|------------|--------|--------|------------|--------|--------|-----------|------------|--------|------------|--------|-----------|------------|--------|
|                        |   | Contractual |       |   | Investment |   |       | Investment |   |   | Total      |   |   |      |       |   | Average    |   |      | Interest   |   |
|                        |   | Principal   |       |   | With No    |   |       | With       |   |   | Recorded   |   |   | Related   |       |   | Recorded   |   |      | Income     |   |
|                        |   | Balance     |       |   | Allowance  |   |       | Allowance  |   |   | Investment |   |   | Allowance |       |   | Investment |   |      | Recognized |   |
|                        |   |        |       |   |       |   |       |       |   |   |       |   |   |      |       |   |       |   |      |       |   |
| Commercial real estate      |   | $           | 11,254,896 |   |       | $      | 5,624,780  |       |   | $      | 5,222,466  |   |   | $         | 10,847,246 |   |       | $      | 500,000   |       |   | $ | 8,710,501 |   |   | $ | 329,446 |   |
| Residential first mortgages |   |        | 928,847    |   |       |   | 928,847    |       |   |   | -          |   |   |      | 928,847    |   |       |   | -         |       |   |   | 924,163 |   |   |   | 52,516 |   |
| Construction and land dev.  |   |        | -          |   |       |   | -          |       |   |   | -          |   |   |      | -          |   |       |   | -         |       |   |   | - |   |   |   | - |   |
| Home equity and second mtg. |   |        | -          |   |       |   | -          |       |   |   | -          |   |   |      | -          |   |       |   | -         |       |   |   | - |   |   |   | - |   |
| Commercial loans            |   |        | 9,292,145  |   |       |   | 3,195,567  |       |   |   | 6,096,578  |   |   |      | 9,292,145  |   |       |   | 1,449,179 |       |   |   | 9,308,552 |   |   |   | 464,956 |   |
| Consumer loans              |   |        | -          |   |       |   | -          |       |   |   | -          |   |   |      | -          |   |       |   | -         |       |   |   | - |   |   |   | - |   |
| Commercial equipment        |   |        | 319,769    |   |       |   | 271,313    |       |   |   | 48,456     |   |   |      | 319,769    |   |       |   | 48,456    |       |   |   | 300,533 |   |   |   | 13,836 |   |
| Total                       |   | $           | 21,795,657 |   |       | $      | 10,020,507 |       |   | $      | 11,367,500 |   |   | $         | 21,388,007 |   |       | $      | 1,997,635 |       |   | $ | 19,243,749 |   |   | $ | 860,754 |   |

----

|                        |   | Years Ended December 31, |       |
|-----------------------------|--------|--------------------------|------------|
|                        |   | 2010                     |       |   | 2009 |   |
|                        |   |                     |       |   | Number |   |   |   |   |   | Number |   |
|                        |   | Dollars                  |       |   | of Loans |   |   | Dollars |   |   | of Loans |   |
|                        |   |                     |       |   |   |   |   |   |   |   |   |   |
| Commercial real estate      |   | $                        | 6,847,618  |   |   |   | 6 |   |   | $ | 6,706,527 |   |   |   | 5 |   |
| Residential first mortgages |   |                     | 928,847    |   |   |   | 2 |   |   |   | 393,812 |   |   |   | 1 |   |
| Commercial loans            |   |                     | 8,834,025  |   |   |   | 7 |   |   |   | 4,440,679 |   |   |   | 4 |   |
| Commercial equipment        |   |                     | 271,313    |   |   |   | 4 |   |   |   | 60,196 |   |   |   | 1 |   |
|                        |   | $                        | 16,881,803 |   |   |   | 19 |   |   | $ | 11,601,215 |   |   |   | 11 |   |

|                             |   | Year Ended December 31, |    |
|----------------------------------|--------|-------------------------|---------|
|                             |   | 2010                    |    |   | 2009 |   |
| Balance at beginning of the year |   | $                       | 132,859 |   |   | $ | - |   |
| Additions                        |   |                    | 103,238 |   |   |   | 152,519 |   |
| Amortization                     |   |                    | (39,449 | ) |   |   | (19,660 | ) |
|                             |   | $                       | 196,648 |   |   | $ | 132,859 |   |

|                             |   | Year Ended December 31, |       |
|----------------------------------|--------|-------------------------|------------|
|                             |   | 2010                    |       |   | 2009 |   |
| Balance at beginning of the year |   | $                       | 922,934    |   |   | $ | - |   |
| Additions of underlying property |   |                    | 11,768,778 |   |   |   | 922,934 |   |
| Disposals of underlying property |   |                    | (1,934,476 | ) |   |   | - |   |
| Valuation allowance              |   |                    | (287,934   | ) |   |   | - |   |
| Balance at end of year           |   | $                       | 10,469,302 |   |   | $ | 922,934 |   |

----

|                |   | Year Ended December 31, |    |
|---------------------|--------|-------------------------|---------|
|                |   | 2010                    |    |   | 2009 |   |
| Valuation allowance |   | $                       | 287,934 |   |   | $ | - |   |
| Operating expenses  |   |                    | 128,465 |   |   |   | 148,156 |   |
|                |   | $                       | 416,399 |   |   | $ | 148,156 |   |

|                          |   | 2010   |       |   | 2009   |   |
|-------------------------------|--------|--------|------------|--------|--------|--------|
|                          |   |   |       |   |   |   |
| Land                          |   | $      | 3,515,200  |   |   | $      | 3,100,039 |   |
| Building and improvements     |   |   | 11,092,569 |   |   |   | 10,779,689 |   |
| Furniture and equipment       |   |   | 4,435,489  |   |   |   | 4,081,595 |   |
| Automobiles                   |   |   | 223,326    |   |   |   | 214,849 |   |
| Total cost                    |   |   | 19,266,584 |   |   |   | 18,176,172 |   |
| Less accumulated depreciation |   |   | 7,134,443  |   |   |   | 6,188,482 |   |
| Premises and equipment, net   |   | $      | 12,132,141 |   |   | $      | 11,987,690 |   |

| 2011       |   | $      | 478,270   |   |
|------------|--------|--------|-----------|--------|
| 2012       |   |   | 487,978   |   |
| 2013       |   |   | 435,695   |   |
| 2014       |   |   | 448,458   |   |
| 2015       |   |   | 453,336   |   |
| Thereafter |   |   | 3,178,121 |   |
|       |   |   |      |   |
| Total      |   | $      | 5,481,858 |   |

|                       |   | 2010   |        |   | 2009   |   |
|----------------------------|--------|--------|-------------|--------|--------|--------|
| Noninterest-bearing demand |   | $      | 75,642,197  |   |   | $      | 70,001,444 |   |
| Interest-bearing:          |   |   |        |   |   |   |   |   |
| Demand                     |   |   | 56,727,102  |   |   |   | 58,650,523 |   |
| Money market deposits      |   |   | 122,330,785 |   |   |   | 102,491,488 |   |
| Savings                    |   |   | 31,683,368  |   |   |   | 28,017,418 |   |
| Certificates of deposit    |   |   | 438,198,874 |   |   |   | 381,257,916 |   |
| Total interest-bearing     |   |   | 648,940,129 |   |   |   | 570,417,345 |   |
|                       |   |   |        |   |   |   |   |   |
| Total Deposits             |   | $      | 724,582,326 |   |   | $      | 640,418,789 |   |

----

| 2011   |   | $      | 276,286,346 |   |
|--------|--------|--------|-------------|--------|
| 2012   |   |   | 88,381,395  |   |
| 2013   |   |   | 39,201,130  |   |
| 2014   |   |   | 10,221,249  |   |
| 2015   |   |   | 24,108,754  |   |
|   |   | $      | 438,198,874 |   |

|                  |   | Fixed- |   |   | Fixed-Rate  |   |   | Variable    |   |
|-----------------------|--------|--------|--------|--------|-------------|--------|--------|-------------|--------|
|                  |   | Rate   |   |   | Convertible |   |   | Convertible |   |
| 2010                  |   |   |   |   |        |   |   |        |   |
| Highest rate          |   |   | 4.04%  |   |        |   | 4.30%  |        |   |   | 4.00% |   |
| Lowest rate           |   |   | 0.84%  |   |        |   | 3.47%  |        |   |   | 4.00% |   |
| Weighted average rate |   |   | 2.74%  |   |        |   | 3.88%  |        |   |   | 4.00% |   |
| Matures through       |   |   | 2036   |   |        |   | 2018   |        |   |   | 2020 |   |
|                  |   |   |   |   |        |   |   |        |   |   |   |   |
| 2009                  |   |   |   |   |        |   |   |        |   |   |   |   |
| Highest rate          |   |   | 4.19%  |   |        |   | 4.30%  |        |   |   | 0.00% |   |
| Lowest rate           |   |   | 1.00%  |   |        |   | 3.47%  |        |   |   | 0.00% |   |
| Weighted average rate |   |   | 3.71%  |   |        |   | 3.88%  |        |   |   | 0.00% |   |
| Matures through       |   |   | 2036   |   |        |   | 2018   |        |   |   | 2020 |   |

|                                                       |   | At or for the Year Ended December 31, |   |
|------------------------------------------------------------|--------|--------------------------------------------------------------------------|--------|
| (dollars in thousands)                                     |   | 2010                                                                     |   |   | 2009 |   |
| Long-term debt                                             |   |                                                                     |   |   |   |   |
| Long-term debt outstanding at end of period                |   | $                                                                        | 70,624 |   |   | $ | 75,670 |   |
| Weighted average rate on outstanding long-term debt        |   |                                                                     | 3.24   | % |   |   | 3.26 | % |
| Maximum outstanding long-term debt of any month end        |   |                                                                     | 70,666 |   |   |   | 100,692 |   |
| Average outstanding long-term debt                         |   |                                                                     | 70,823 |   |   |   | 94,745 |   |
| Approximate average rate paid on long-term debt            |   |                                                                     | 3.22   | % |   |   | 3.70 | % |
|                                                       |   |                                                                     |   |   |   |   |   |   |
| Short-term borrowings                                      |   |                                                                     |   |   |   |   |   |   |
| Short-term borrowings outstanding at end of period         |   | $                                                                        | 816    |   |   | $ | 13,081 |   |
| Weighted average rate on short-term borrowings             |   |                                                                     | 0.00   | % |   |   | 0.34 | % |
| Maximum outstanding short-term borrowings at any month end |   |                                                                     | 11,322 |   |   |   | 13,081 |   |
| Average outstanding short-term borrowings                  |   |                                                                     | 2,973  |   |   |   | 1,421 |   |
| Approximate average rate paid on short-term borrowings     |   |                                                                     | 1.41   | % |   |   | 2.06 | % |

----

|        |   | December 31, 2010 |       |
|-------------|--------|-------------------|------------|
|        |   | Fixed-            |       |   | Fixed-Rate |   |   | Variable |   |   |   |   |
|        |   | Rate              |       |   | Convertible |   |   | Convertible |   |   | Total |   |
|        |   |              |       |   |   |   |   |   |   |   |   |   |
| Due in 2011 |   | $                 | 10,000,000 |   |   | $ | - |   |   | $ | - |   |   | $ | 10,000,000 |   |
| Due in 2012 |   |              | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Due in 2013 |   |              | 5,000,000  |   |   |   | - |   |   |   | - |   |   |   | 5,000,000 |   |
| Due in 2014 |   |              | 10,750,000 |   |   |   | 10,000,000 |   |   |   | - |   |   |   | 20,750,000 |   |
| Due in 2015 |   |              | 14,000,000 |   |   |   | - |   |   |   | - |   |   |   | 14,000,000 |   |
| Thereafter  |   |              | 874,044    |   |   |   | 10,000,000 |   |   |   | 10,000,000 |   |   |   | 20,874,044 |   |
|        |   | $                 | 40,624,044 |   |   | $ | 20,000,000 |   |   | $ | 10,000,000 |   |   | $ | 70,624,044 |   |

----

|                     |   | 2010   |      |   | 2009   |   |
|--------------------------|--------|--------|-----------|--------|--------|--------|
| Current                  |   |   |      |   |   |   |
| Federal                  |   | $      | 2,642,443 |   |   | $      | 2,463,419 |   |
| State                    |   |   | 784,091   |   |   |   | 718,444 |   |
|                     |   |   | 3,426,534 |   |   |   | 3,181,863 |   |
|                     |   |   |      |   |   |   |   |   |
| Deferred                 |   |   |      |   |   |   |   |   |
| Federal                  |   |   | (671,587  | )      |   |   | (1,357,027 | ) |
| State                    |   |   | (112,331  | )      |   |   | (213,168 | ) |
|                     |   |   | (783,918  | )      |   |   | (1,570,195 | ) |
| Total income tax expense |   | $      | 2,642,616 |   |   | $      | 1,611,668 |   |

|                                            |   | 2010   |      |   | 2009                        |   |
|-------------------------------------------------|--------|--------|-----------|--------|-----------------------------|--------|
|                                            |   | Amount |      |   | Percentof PreTaxIncome |   |   | Amount |   |   | Percentof PreTaxIncome |   |
| Expected income tax expense at federal tax rate |   | $      | 2,518,828 |   |                        |   | 34.00 | % |   | $ | 1,522,778 |   |   |   | 34.00 | % |
| State taxes net of federal benefit              |   |   | 146,501   |   |                        |   | 1.98 | % |   |   | 329,641 |   |   |   | 7.36 | % |
| Nondeductible expenses                          |   |   | 24,108    |   |                        |   | 0.33 | % |   |   | 16,032 |   |   |   | 0.36 | % |
| Nontaxable income                               |   |   | (312,542  | )      |                        |   | (4.22 | )% |   |   | (272,036 | ) |   |   | (6.07 | )% |
| Other                                           |   |   | 265,721   |   |                        |   | 3.59 | % |   |   | 15,253 |   |   |   | 0.34 | % |
|                                            |   |   |      |   |                        |   |   |   |   |   |   |   |   |   |   |   |
|                                            |   | $      | 2,642,616 |   |                        |   | 35.67 | % |   | $ | 1,611,668 |   |   |   | 35.98 | % |

|                                     |   | 2010   |      |   | 2009   |   |
|------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Deferred tax assets                      |   |   |      |   |   |   |
| Deferred fees                            |   | $      | 1,410     |   |   | $      | 1,470 |   |
| Allowance for loan losses                |   |   | 3,025,478 |   |   |   | 2,947,433 |   |
| Deferred compensation                    |   |   | 1,624,462 |   |   |   | 1,351,433 |   |
| Other                                    |   |   | 872,426   |   |   |   | 533,217 |   |
|                                     |   |   | 5,523,776 |   |   |   | 4,833,553 |   |
| Deferred tax liabilities                 |   |   |      |   |   |   |   |   |
| Unrealized gain on investment securities |   |   | 211,824   |   |   |   | 146,548 |   |
| FHLB stock dividends                     |   |   | 156,182   |   |   |   | 156,182 |   |
| Depreciation                             |   |   | 94,213    |   |   |   | 166,634 |   |
|                                     |   |   | 462,219   |   |   |   | 469,364 |   |
|                                     |   |   |      |   |   |   |   |   |
|                                     |   | $      | 5,061,557 |   |   | $      | 4,364,189 |   |

----

----

|                             |   |   |    |   | Weighted |     |   |      |      |   | Weighted-Average |             |
|----------------------------------|--------|--------|---------|--------|----------|----------|--------|-----------|-----------|--------|------------------|------------------|
|                             |   |   |    |   | Average  |     |   | Aggregate |      |   | Contractual Life |             |
|                             |   |   |    |   | Exercise |     |   | Intrinsic |      |   | Remaining In     |             |
|                             |   | Shares |    |   | Price    |     |   | Value     |      |   | Years            |             |
|                             |   |   |    |   |     |     |   |      |      |   |             |             |
| Outstanding at January 1, 2010   |   |   | 329,243 |   |     | $        | 16.04  |      |      | $      | 222,607          |             |   |   |   |
| Granted at fair value            |   |   | -       |   |     |     | -      |      |      |   |             |             |   |   |   |
| Exercised                        |   |   | (29,413 | )      |     |     | 7.89   |      |      |   | 209,132          |             |   |   |   |
| Expired                          |   |   | -       |   |     |     | -      |      |      |   |             |             |   |   |   |
| Forfeited                        |   |   | (593    | )      |     |     | 7.91   |      |      |   |             |             |   |   |   |
| Outstanding at December 31, 2010 |   |   | 299,237 |   |     | $        | 16.86  |      |      | $      | 524,392          |             |   |   | 2.0 |   |
|                             |   |   |    |   |     |     |   |      |      |   |             |             |   |   |   |   |
| Exercisable at December 31, 2010 |   |   | 299,237 |   |     | $        | 16.86  |      |      | $      | 524,392          |             |   |   | 2.0 |   |
|                             |   |   |    |   |     |     |   |      |      |   |             |             |   |   |   |   |
|                             |   |   |    |   |     | Weighted |   |      |      |   |             |             | Weighted-Average |   |
|                             |   |   |    |   |     | Average  |   |      | Aggregate |   |             | Contractual Life |   |
|                             |   |   |    |   |     | Exercise |   |      | Intrinsic |   |             | Remaining In     |   |
|                             |   | Shares |    |   | Price    |     |   | Value     |      |   | Years            |             |
|                             |   |   |    |   |     |     |   |      |      |   |             |             |   |   |   |   |
| Outstanding at January 1, 2009   |   |   | 353,217 |   |     | $        | 15.49  |      |      | $      | 978,371          |             |   |   |   |   |
| Granted at fair value            |   |   | -       |   |     |     | -      |      |      |   |             |             |   |   |   |   |
| Exercised                        |   |   | (22,959 | )      |     |     | 7.97   |      |      |   | 77,489           |             |   |   |   |   |
| Expired                          |   |   | (1,013  | )      |     |     | 7.88   |      |      |   |             |             |   |   |   |   |
| Forfeited                        |   |   | (2      | )      |     |     | 7.88   |      |      |   |             |             |   |   |   |   |
|                             |   |   |    |   |     |     |   |      |      |   |             |             |   |   |   |   |
| Outstanding at December 31, 2009 |   |   | 329,243 |   |     | $        | 16.04  |      |      | $      | 222,607          |             |   |   | 1.6 |   |
|                             |   |   |    |   |     |     |   |      |      |   |             |             |   |   |   |   |
| Exercisable at December 31, 2009 |   |   | 329,243 |   |     | $        | 16.04  |      |      | $      | 222,607          |             |   |   | 1.6 |   |

| Number Outstanding     |    | Weighted Average                |   | Weighted Average |   |
|-----------------------------|---------|--------------------------------------|--------|-----------------------|--------|
| December 31, 2010 |    | Remaining Contractual Life |   | Exercise Price   |   |
|                        | 26,931  |                                 |   | 1 years               |   | $ | 7.92 |   |   |
|                        | 18,947  |                                 |   | 2 years               |   |   | 11.56 |   |   |
|                        | 62,880  |                                 |   | 3 years               |   |   | 12.93 |   |   |
|                        | 87,955  |                                 |   | 4 years               |   |   | 15.89 |   |   |
|                        | 80,813  |                                 |   | 5 years               |   |   | 22.29 |   |   |
|                        | 21,711  |                                 |   | 7 years               |   |   | 27.70 |   |   |
|                        | 299,237 |                                 |   |                  |   |   | 16.86 |   |   |

----

|                           |   | Restricted Stock |   |   | Restricted Stock Units                    |   |
|--------------------------------|--------|-----------------------|--------|--------|-----------------------------------------------------|--------|
|                           |   | Number ofShares  |   |   | WeightedAverage GrantDate Fair Value |   |   | Number ofUnits |   |   | Fair Value |   |
|                           |   |                  |   |   |                                                |   |   |   |   |   |   |   |
| Nonvested at January 1, 2010   |   |                  | 5,360  |   |                                                | $      | 11.90 |   |   |   | - |   |   | $ | - |   |
| Granted                        |   |                  | -      |   |                                                |   | - |   |   |   | 3,739 |   |   |   | 13.00 |   |
| Vested                         |   |                  | (2,640 | )      |                                                |   | 11.90 |   |   |   | - |   |   |   | - |   |
|                           |   |                  |   |   |                                                |   |   |   |   |   |   |   |   |   |   |   |
| Nonvested at December 31, 2010 |   |                  | 2,720  |   |                                                | $      | 11.90 |   |   |   | 3,739 |   |   | $ | 16.10 |   |

----

|                                     |   | Actual |   |   | Required for CapitalAdequacy Purposes |   |   | To be ConsideredWell CapitalizedUnder Prompt Corrective Action |   |
|------------------------------------------|--------|--------|--------|--------|------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------|--------|
| At December 31, 2010                     |   |   |   |   |                                                 |   |   |                                                                                         |   |   |   |   |   |   |   |   |   |   |
| Total Capital (to risk weighted assets)  |   |   |   |   |                                                 |   |   |                                                                                         |   |   |   |   |   |   |   |   |   |   |
| The Company                              |   | $      | 90,343 |   |                                                 |   | 12.94  | %                                                                                            |   | $ | 55,857 |   |   |   | 8.00 | % |   |   |   |   |   |   |
| The Bank                                 |   | $      | 88,021 |   |                                                 |   | 12.65  | %                                                                                            |   | $ | 55,633 |   |   |   | 8.00 | % |   | $ | 69,542 |   |   |   | 10.00 | % |
|                                     |   |   |   |   |                                                 |   |   |                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 Capital (to risk weighted assets) |   |   |   |   |                                                 |   |   |                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The Company                              |   | $      | 82,694 |   |                                                 |   | 11.84  | %                                                                                            |   | $ | 27,928 |   |   |   | 4.00 | % |   |   |   |   |   |   |   |   |
| The Bank                                 |   | $      | 80,372 |   |                                                 |   | 11.56  | %                                                                                            |   | $ | 27,817 |   |   |   | 4.00 | % |   | $ | 41,725 |   |   |   | 6.00 | % |
|                                     |   |   |   |   |                                                 |   |   |                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 Capital (to average assets)       |   |   |   |   |                                                 |   |   |                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The Company                              |   | $      | 82,694 |   |                                                 |   | 9.44   | %                                                                                            |   | $ | 35,030 |   |   |   | 4.00 | % |   |   |   |   |   |   |   |   |
| The Bank                                 |   | $      | 80,372 |   |                                                 |   | 9.20   | %                                                                                            |   | $ | 34,928 |   |   |   | 4.00 | % |   | $ | 43,661 |   |   |   | 5.00 | % |
|                                     |   |   |   |   |                                                 |   |   |                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| At December 31, 2009                     |   |   |   |   |                                                 |   |   |                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Capital (to risk weighted assets)  |   |   |   |   |                                                 |   |   |                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The Company                              |   | $      | 87,416 |   |                                                 |   | 13.46  | %                                                                                            |   | $ | 51,973 |   |   |   | 8.00 | % |   |   |   |   |   |   |   |   |
| The Bank                                 |   | $      | 85,028 |   |                                                 |   | 13.14  | %                                                                                            |   | $ | 51,787 |   |   |   | 8.00 | % |   | $ | 64,734 |   |   |   | 10.00 | % |
|                                     |   |   |   |   |                                                 |   |   |                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 Capital (to risk weighted assets) |   |   |   |   |                                                 |   |   |                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The Company                              |   | $      | 79,905 |   |                                                 |   | 12.30  | %                                                                                            |   | $ | 25,987 |   |   |   | 4.00 | % |   |   |   |   |   |   |   |   |
| The Bank                                 |   | $      | 77,517 |   |                                                 |   | 11.97  | %                                                                                            |   | $ | 25,894 |   |   |   | 4.00 | % |   | $ | 38,840 |   |   |   | 6.00 | % |
|                                     |   |   |   |   |                                                 |   |   |                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 Capital (to average assets)       |   |   |   |   |                                                 |   |   |                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The Company                              |   | $      | 79,905 |   |                                                 |   | 10.03  | %                                                                                            |   | $ | 31,880 |   |   |   | 4.00 | % |   |   |   |   |   |   |   |   |
| The Bank                                 |   | $      | 77,517 |   |                                                 |   | 9.74   | %                                                                                            |   | $ | 31,840 |   |   |   | 4.00 | % |   | $ | 39,800 |   |   |   | 5.00 | % |

----

|                                                                       |   | December 31, 2010 |        |   | December 31, 2009 |   |
|----------------------------------------------------------------------------|--------|-------------------|-------------|--------|-------------------|--------|
|                                                                       |   |              |        |   | Estimated         |   |   |   |   |   | Estimated |   |
|                                                                       |   | Carrying          |        |   | Fair              |   |   | Carrying |   |   | Fair |   |
|                                                                       |   | Amount            |        |   | Value             |   |   | Amount |   |   | Value |   |
| Assets                                                                     |   |              |        |   |              |   |   |   |   |   |   |   |
| Cash and cash equivalents                                                  |   | $                 | 9,823,436   |   |              | $      | 9,823,436 |   |   | $ | 11,247,967 |   |   | $ | 11,247,967 |   |
| Investment securities and stock in FHLB and FRB                            |   |              | 168,250,141 |   |              |   | 167,654,621 |   |   |   | 151,149,412 |   |   |   | 148,049,000 |   |
| Loans receivable, net                                                      |   |              | 654,449,936 |   |              |   | 662,813,000 |   |   |   | 616,592,976 |   |   |   | 610,998,000 |   |
| Foreclosed real estate                                                     |   |              | 10,469,302  |   |              |   | 10,469,302 |   |   |   | 922,934 |   |   |   | 922,934 |   |
|                                                                       |   |              |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                                                                |   |              |        |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Savings, NOW, and money market accounts                                    |   |              | 286,383,452 |   |              |   | 286,383,453 |   |   |   | 259,160,873 |   |   |   | 246,139,000 |   |
| Time certificates                                                          |   |              | 438,198,874 |   |              |   | 444,601,000 |   |   |   | 381,257,916 |   |   |   | 384,848,000 |   |
| Long-term debt and other borrowed funds                                    |   |              | 71,440,466  |   |              |   | 69,517,422 |   |   |   | 88,750,160 |   |   |   | 83,381,000 |   |
| Guaranteed preferred beneficial interest in junior subordinated securities |   |              | 12,000,000  |   |              |   | 2,400,000 |   |   |   | 12,000,000 |   |   |   | 2,400,000 |   |

----

----

|                                                                       |   | December 31, |       |
|----------------------------------------------------------------------------|--------|--------------|------------|
|                                                                       |   | 2010         |       |   | 2009 |   |
| Assets                                                                     |   |         |       |   |   |   |
| Cash - noninterest-bearing                                                 |   | $            | 583,660    |   |   | $ | 863,305 |   |
| Investment in wholly owned subsidiaries                                    |   |         | 81,155,647 |   |   |   | 78,173,565 |   |
| Other assets                                                               |   |         | 2,417,496  |   |   |   | 1,955,554 |   |
| Total Assets                                                               |   | $            | 84,156,803 |   |   | $ | 80,992,424 |   |
|                                                                       |   |         |       |   |   |   |   |   |
| Liabilities and Stockholders' Equity                                       |   |         |       |   |   |   |   |   |
| Current liabilities                                                        |   | $            | 679,876    |   |   | $ | 430,575 |   |
| Guaranteed preferred beneficial interest in junior subordinated debentures |   |         | 12,372,000 |   |   |   | 12,372,000 |   |
| Total Liabilities                                                          |   |         | 13,051,876 |   |   |   | 12,802,575 |   |
|                                                                       |   |         |       |   |   |   |   |   |
| Stockholders' Equity                                                       |   |         |       |   |   |   |   |   |
| Preferred Stock - Series A                                                 |   |         | 15,540,000 |   |   |   | 15,540,000 |   |
| Preferred Stock - Series B                                                 |   |         | 777,000    |   |   |   | 777,000 |   |
| Common stock                                                               |   |         | 30,026     |   |   |   | 29,760 |   |
| Additional paid in capital                                                 |   |         | 16,962,460 |   |   |   | 16,754,627 |   |
| Retained earnings                                                          |   |         | 37,892,557 |   |   |   | 35,193,958 |   |
| Accumulated other comprehensive income                                     |   |         | 411,188    |   |   |   | 284,474 |   |
| Unearned ESOP shares                                                       |   |         | (508,304   | ) |   |   | (389,970 | ) |
| Total Stockholders’ Equity                                           |   |         | 71,104,927 |   |   |   | 68,189,849 |   |
|                                                                       |   |         |       |   |   |   |   |   |
| Total Liabilities and Stockholders’ Equity                           |   | $            | 84,156,803 |   |   | $ | 80,992,424 |   |

----

|                                                                             |   | Years Ended December 31, |       |
|----------------------------------------------------------------------------------|--------|--------------------------|------------|
|                                                                             |   | 2010                     |       |   | 2009 |   |
| Interest and Dividend Income                                                     |   |                     |       |   |   |   |
| Dividends from subsidiary                                                        |   | $                        | 2,500,000  |   |   | $ | 2,950,000 |   |
| Interest income                                                                  |   |                     | 29,068     |   |   |   | 29,284 |   |
| Interest expense                                                                 |   |                     | 321,942    |   |   |   | 402,914 |   |
| Net Interest Income                                                              |   |                     | 2,207,126  |   |   |   | 2,576,370 |   |
| Loss on sale of investment securities                                            |   |                     | -          |   |   |   | (11,916 | ) |
| Miscellaneous expenses                                                           |   |                     | (600,562   | ) |   |   | (513,795 | ) |
| Income before income taxes and equity in undistributed net income of subsidiary  |   |                     | 1,606,564  |   |   |   | 2,050,659 |   |
| Federal and state income tax benefit                                             |   |                     | 303,768    |   |   |   | 305,775 |   |
| Equity in undistributed net income of subsidiary                                 |   |                     | 2,855,369  |   |   |   | 510,656 |   |
| Net Income                                                                       |   | $                        | 4,765,701  |   |   | $ | 2,867,090 |   |
|                                                                             |   |                     |       |   |   |   |   |   |
| Condensed Statements of Cash Flows                                               |   |
|                                                                             |   | Years Ended December 31, |       |
|                                                                             |   | 2010                     |       |   | 2009 |   |
| Cash Flows from Operating Activities                                             |   |                     |       |   |   |   |   |   |
| Net income                                                                       |   | $                        | 4,765,701  |   |   | $ | 2,867,090 |   |
| Adjustments to reconcile net income to net cash provided by operating activities |   |                     |       |   |   |   |   |   |
| Equity in undistributed earnings of subsidiary                                   |   |                     | (2,855,369 | ) |   |   | (510,656 | ) |
| Loss on sale of investment security                                              |   |                     | -          |   |   |   | 11,916 |   |
| Increase in other assets                                                         |   |                     | (401,159   | ) |   |   | (252,150 | ) |
| Deferred income tax benefit                                                      |   |                     | (60,782    | ) |   |   | (68,991 | ) |
| Increase in current liabilities                                                  |   |                     | 249,301    |   |   |   | 28,970 |   |
| Net Cash Provided by Operating Activities                                        |   |                     | 1,697,692  |   |   |   | 2,076,179 |   |
|                                                                             |   |                     |       |   |   |   |   |   |
| Cash Flows from Investing Activities                                             |   |                     |       |   |   |   |   |   |
| Redemption of investment securities available for sale                           |   |                     | -          |   |   |   | 28,785 |   |
| Net Cash Provided by Investing Activities                                        |   |                     | -          |   |   |   | 28,785 |   |
|                                                                             |   |                     |       |   |   |   |   |   |
| Cash Flows from Financing Activities                                             |   |                     |       |   |   |   |   |   |
| Dividends paid                                                                   |   |                     | (2,043,117 | ) |   |   | (1,953,851 | ) |
| Exercise of stock options                                                        |   |                     | 147,799    |   |   |   | 122,308 |   |
| Issuance of stock based compensation                                             |   |                     | -          |   |   |   | 99,976 |   |
| Excess tax benefits on stock based compensation                                  |   |                     | 4,558      |   |   |   | 14,947 |   |
| Net change in ESOP loan                                                          |   |                     | (62,577    | ) |   |   | (129,670 | ) |
| Redemption of common stock                                                       |   |                     | (24,000    | ) |   |   | - |   |
| Net Cash Used in Financing Activities                                            |   |                     | (1,977,337 | ) |   |   | (1,846,290 | ) |
| (Decrease) Increase in Cash                                                      |   |                     | (279,645   | ) |   |   | 258,674 |   |
| Cash at Beginning of Year                                                        |   |                     | 863,305    |   |   |   | 604,631 |   |
| Cash at End of Year                                                              |   | $                        | 583,660    |   |   | $ | 863,305 |   |

----

|                                |   | 2010    |      |
|-------------------------------------|--------|---------|-----------|
|                                |   | Fourth  |      |   | Third |   |   | Second |   |   | First |   |
|                                |   | Quarter |      |   | Quarter |   |   | Quarter |   |   | Quarter |   |
|                                |   |    |      |   |   |   |   |   |   |   |   |   |
| Interest and dividend income        |   | $       | 9,874,883 |   |   | $ | 9,805,485 |   |   | $ | 9,893,082 |   |   | $ | 9,963,537 |   |
| Interest expense                    |   |    | 3,398,511 |   |   |   | 3,372,947 |   |   |   | 3,329,856 |   |   |   | 3,478,901 |   |
| Net interest income                 |   |    | 6,476,372 |   |   |   | 6,432,538 |   |   |   | 6,563,226 |   |   |   | 6,484,636 |   |
| Provision for loan loss             |   |    | 1,149,441 |   |   |   | 1,121,203 |   |   |   | 804,430 |   |   |   | 858,374 |   |
| Net interest income after provision |   |    | 5,326,931 |   |   |   | 5,311,335 |   |   |   | 5,758,796 |   |   |   | 5,626,262 |   |
|                                |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest income                  |   |    | 1,079,848 |   |   |   | 994,759 |   |   |   | 744,344 |   |   |   | 761,225 |   |
| Noninterest expense                 |   |    | 4,619,716 |   |   |   | 4,437,425 |   |   |   | 4,899,633 |   |   |   | 4,238,409 |   |
|                                |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before income taxes          |   |    | 1,787,063 |   |   |   | 1,868,669 |   |   |   | 1,603,507 |   |   |   | 2,149,078 |   |
| Provision for income taxes          |   |    | 621,204   |   |   |   | 669,335 |   |   |   | 567,423 |   |   |   | 784,654 |   |
| Net income                          |   | $       | 1,165,859 |   |   | $ | 1,199,334 |   |   | $ | 1,036,084 |   |   | $ | 1,364,424 |   |
|                                |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per common share1          |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                               |   | $       | 0.32      |   |   | $ | 0.33 |   |   | $ | 0.28 |   |   | $ | 0.39 |   |
| Diluted                             |   | $       | 0.32      |   |   | $ | 0.33 |   |   | $ | 0.27 |   |   | $ | 0.38 |   |
|                                |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |   | 2009    |      |
|                                |   | Fourth  |      |   | Third |   |   | Second |   |   | First |   |
|                                |   | Quarter |      |   | Quarter |   |   | Quarter |   |   | Quarter |   |
|                                |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest and dividend income        |   | $       | 9,713,417 |   |   | $ | 9,620,495 |   |   | $ | 9,350,365 |   |   | $ | 9,203,076 |   |
| Interest expense                    |   |    | 3,648,007 |   |   |   | 4,078,019 |   |   |   | 4,180,031 |   |   |   | 4,260,071 |   |
| Net interest income                 |   |    | 6,065,410 |   |   |   | 5,542,476 |   |   |   | 5,170,334 |   |   |   | 4,943,005 |   |
| Provision for loan loss             |   |    | 1,494,680 |   |   |   | 515,555 |   |   |   | 929,488 |   |   |   | 532,885 |   |
| Net interest income after provision |   |    | 4,570,730 |   |   |   | 5,026,921 |   |   |   | 4,240,846 |   |   |   | 4,410,120 |   |
|                                |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest income                  |   |    | 773,244   |   |   |   | 668,347 |   |   |   | 781,771 |   |   |   | 586,457 |   |
| Noninterest expense                 |   |    | 4,219,791 |   |   |   | 4,267,052 |   |   |   | 4,278,673 |   |   |   | 3,814,162 |   |
|                                |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before income taxes          |   |    | 1,124,183 |   |   |   | 1,428,216 |   |   |   | 743,944 |   |   |   | 1,182,415 |   |
| Provision for income taxes          |   |    | 416,723   |   |   |   | 560,640 |   |   |   | 221,730 |   |   |   | 412,575 |   |
| Net income                          |   | $       | 707,460   |   |   | $ | 867,576 |   |   | $ | 522,214 |   |   | $ | 769,840 |   |
|                                |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per common share1          |   |    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                               |   | $       | 0.17      |   |   | $ | 0.22 |   |   | $ | 0.10 |   |   | $ | 0.19 |   |
| Diluted                             |   | $       | 0.17      |   |   | $ | 0.22 |   |   | $ | 0.10 |   |   | $ | 0.19 |   |

----